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<SEC-DOCUMENT>0001137171-06-000470.txt : 20060302
<SEC-HEADER>0001137171-06-000470.hdr.sgml : 20060302
<ACCEPTANCE-DATETIME>20060302131345
ACCESSION NUMBER:		0001137171-06-000470
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20040930
FILED AS OF DATE:		20060302
DATE AS OF CHANGE:		20060302

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PAN AMERICAN SILVER CORP
		CENTRAL INDEX KEY:			0000771992
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-13727
		FILM NUMBER:		06658932

	BUSINESS ADDRESS:	
		STREET 1:		1500-625 HOWE STREET
		CITY:			VANCOUVER BC CANADA
		STATE:			A1
		ZIP:			V6C 2T6

	MAIL ADDRESS:	
		STREET 1:		1500 625 HOWE ST
		CITY:			VANCOUVER BC V6C 2T6
		STATE:			A1
		ZIP:			999999999

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PAN AMERICAN MINERALS CORP
		DATE OF NAME CHANGE:	19950608
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>panamerican6k030206c.htm
<DESCRIPTION>6-K FILING FOR PAN AMERICAN SILVER
<TEXT>
<html>

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<title> CC Filed by Filing Services Canada Inc. 403-717-3898</title>
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  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>FORM
  6-K</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>SECURITIES
  AND EXCHANGE COMMISSION</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Washington,
  D.C. 20549</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Report
  of Foreign Private Issuer</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Pursuant
  to Rule 13a-16 or 15d-16</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>of
  the Securities Exchange Act of 1934</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">For
  the month of October</font><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">,
  2004</font>
  <p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Commission
  File Number: 000-13727</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>Pan
  American Silver Corp.</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Translation
  of registrant's name into English)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <br>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>1500-625
  HOWE STREET</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>VANCOUVER
  BC CANADA V6C 2T6</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Address
  of principal executive offices)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Indicate
  by check mark whether the registrant files or will file annual reports under
  cover Form 20-F or Form 40-F.</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Form
  20-F___ &nbsp;&nbsp;Form 40-F &nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;X&nbsp;&nbsp;</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;<p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Indicate
  by check mark if the registrant is submitting the Form 6-K in paper as
  permitted by Regulation S-T Rule 101(b)(1):&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font><p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Indicate
  by check mark if the registrant is submitting the Form 6-K in paper as
  permitted by Regulation S-T Rule 101(b)(7):&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font><p>&nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Indicate
  by check mark whether the registrant by furnishing the information contained
  in this Form is also thereby furnishing the information to the Commission
  pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Yes
  ..... &nbsp;No ..X...</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">If
  &quot;Yes&quot; is marked, indicate below the file number assigned to the
  registrant in connection with Rule 12g3-2(b): &nbsp;82-________</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Signatures</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Pursuant
  to the requirements of the Securities Exchange Act of 1934, the registrant has
  duly caused this report to be signed on its behalf by the undersigned,
  thereunto duly authorized.</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>Pan
  American Silver Corp.</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Registrant)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">By:<u>/s/
  Ross Beaty&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Signature)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Ross
  Beaty, </font><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Chairman</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Date:
  </font><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">March
  2, 2006</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="display: block; text-indent: 0pt; line-height: 1.25; width: 928; height: 19; margin-left: 0pt; margin-right: 0pt" align="left">
  <font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Ross
  Beaty, Chairman </font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Exhibit:
  </font>
  <p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">99.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="results04q3.htm">News
  Release for September 30, 2004 (Restated March 2, 2006)</a>

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</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>results04q3.htm
<DESCRIPTION>THIRD QUARTER RESULTS
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>CC Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
<META NAME="author" CONTENT="gordon">
<META NAME="date" CONTENT="03/02/2006">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<P style="margin:0pt"><img src="results04q3002.gif" alt="[results04q3002.gif]" align=middle height=43.8 width=42.8></P>
<P style="margin:0pt"><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=center><FONT FACE="Arial" COLOR=#000000><B>RECORD PROFITS, CASH FLOW AND PRODUCTION IN THIRD QUARTER<BR>
MARK PAN AMERICAN SILVER&#180;S TENTH ANNIVERSARY (Restated March 2, 2006)</B></FONT></P>
<P style="margin:0pt; font-family:Arial" align=center>(all amounts in US dollars unless otherwise stated)</P>
<P style="margin:0pt"><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>This press release presented below reflects the effects of the restatement on the consolidated financial statements as at September 30, 2004 and for the three and nine month periods ended September 30, 2004. &nbsp;See &quot;Restatement&quot; in the Management&#146;s Discussion &amp; Analysis for further discussion of this matter. &nbsp;Apart from revisions described under &#147;Restatement&#148;, this news release has not been revised for new events or developments.</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt"><B><U>THIRD QUARTER HIGHLIGHTS</U></B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:-12.5pt; padding-left:18pt; text-indent:-18pt; font-family:Symbol; font-size:10.5pt" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:12.5pt; margin:0pt; padding-left:18pt; font-family:Arial; font-size:10.5pt" align=justify><FONT FACE="Arial">Net earnings of $0.4 million for the quarter ($0.01/share) versus a net loss of $1.2 million ($0.10) in the third quarter of 2003. Net earnings year-to-date of $1.7 million.</FONT></P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:-12.5pt; padding-left:18pt; text-indent:-18pt; font-family:Symbol; font-size:10.5pt" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:12.5pt; margin:0pt; padding-left:18pt; font-family:Arial; font-size:10.5pt" align=justify><FONT FACE="Arial">Record consolidated revenue of $27.9 million - 135% over the third quarter of 2003.</FONT></P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:-12.5pt; padding-left:18pt; text-indent:-18pt; font-family:Symbol; font-size:10.5pt" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:12.5pt; margin:0pt; padding-left:18pt; font-family:Arial; font-size:10.5pt" align=justify><FONT FACE="Arial">Record cash flow from operations, before changes to non-cash working capital, of $7.0 million, versus $0.3 million in 2003 - the eighth consecutive quarter of improved operating profits.</FONT></P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:-12.5pt; padding-left:18pt; text-indent:-18pt; font-family:Symbol; font-size:10.5pt" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:12.5pt; margin:0pt; padding-left:18pt; font-family:Arial; font-size:10.5pt" align=justify><FONT FACE="Arial">Record quarterly silver production of 3.2 million ounces, an increase of 45% over the same period of 2003.</FONT></P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:-12.5pt; padding-left:18pt; text-indent:-18pt; font-family:Symbol; font-size:10.5pt" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:12.5pt; margin:0pt; padding-left:18pt; font-family:Arial; font-size:10.5pt" align=justify><FONT FACE="Arial">Completion of acquisition of 84% of the Morococha silver mine in Peru.</FONT></P>
<P style="margin:0pt"><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt"><B><U>FINANCIAL RESULTS </U></B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAA) reported consolidated revenue for the second quarter of $27.9 million, 135% greater than revenue in the third quarter of 2003 due to increased silver production, higher realized metal prices and higher sales from concentrate inventory. Net earnings for the quarter were $0.4 million compared to a net loss of $1.2 million in 2003. Cash flow from operating activities before changes to non-cash working capital increased to $7.0 million for the quarter.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>Consolidated silver production for the third quarter was 3,173,000 ounces, a 45% increase over the third quarter of 2003 and the greatest quarterly production in the Company&#146;s history. Steady-state production from Quiruvilca, Huaron and the pyrite stockpiles was complemented by the addition of production from the newly acquired Morococha mine as of July 1, 2004. Zinc production of 10,367 tonnes was 37% higher than in the third quarter of 2003 while lead production of 4,876 tonnes was 12.5% higher also due to the addition of Morococha production. </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>Consolidated cash costs in the third quarter rose from $3.87/oz to $4.07/oz and total costs rose from $4.39/oz to $5.09/oz due to an expected temporary increase in production costs at the La Colorada mine. Positive results from the new mine plan and more selective mining methods that have been implemented will begin to be realized in the fourth quarter. </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>Capital spending in the third quarter declined slightly to $3.1 million, excluding $36.2 million spent to acquire the Morococha mine. Exploration spending doubled to $1.2 million in the third quarter, primarily reflecting increased activity at the Manantial Espejo and San Vicente development projects.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>For the nine months ended September 30, 2004, consolidated revenue totaled $64.8 million versus $32.3 million in the year-earlier period due to higher production and higher realized metal prices. Net earnings were $1.7 million versus a net loss of $4.0 million in the first nine months of 2003. </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>Consolidated silver production in the first nine months of 2004 was 8,058,443 ounces, a 24% increase over the same period in 2003 &#150; on track for 11.5 million ounces in 2004. &nbsp;Zinc production of 24,890 tonnes and copper production of 2,376 tonnes were unchanged from 2003 levels. &nbsp;Lead production of 12,973 tonnes was 12.5% lower than in 2003 due to lower lead production at Huaron. Cash production costs for the first nine months of 2004 declined 3% to $4.01/oz, while total production costs rose 8% to $5.00 due to higher depreciation charges.</P>
<P style="margin:0pt" align=justify>&nbsp;</P>
<hr>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>Working capital at September 30, 2004, including cash and short-term investments of $80.8 million, improved to $94.6 million, an increase of $12.6 million from December 31, 2003. The change in working capital stems from the receipt of $54.8 million in net proceeds from a share issuance in February, offset by the purchase of the Morococha mine completed during the quarter. &nbsp;Capital spending in the first nine months of 2004 was $9.7 million excluding the purchase of Morococha, down from $12.5 million a year earlier. Exploration spending increased from $1.6 million in the first three quarters of 2003 to $2.9 million in 2004, reflecting increased project development activity and drill programs to expand reserves at Huaron, San Vicente and now Morococha.</P>
<P style="margin:0pt"><BR></P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10.5pt" align=justify>Ross Beaty, Chairman of Pan American said, &#147;This is the eighth consecutive quarter that Pan American has improved its operating profit &#150; and we set new records for earnings, cash flow and production. Our operations are strong, our development projects are progressing well and we have one of the best balance sheets in the industry with virtually no debt. We completed the acquisition of the low-cost Morococha silver mine last quarter and we are fully funded to start building another new mine within the next 12 months. Pan American Silver is in great shape today and we look forward to an even better future.&#148; </P>
<P style="margin:0pt"><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify><B><U>OPERATIONS AND DEVELOPMENT HIGHLIGHTS</U></B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify><B>PERU</B></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>The <B>Quiruvilca mine</B> continued its turn-around in the third quarter with production of 654,182 ounces of silver, up 2% over 2003 levels. Cash and total production costs dropped markedly, from $4.69/oz and $4.85/oz respectively to $3.34/oz in the current quarter. For the first nine months of the year the mine produced 1,892,383 ounces of silver at a cash cost of $3.27/oz, versus similar production at a cash cost of $5.31/oz in 2003. A new life-of-mine plan is now being developed at Quiruvilca based on the discovery of a major new vein structure announced in the second quarter.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>Silver production at the <B>Huaron mine</B> remained steady in the third quarter at 1,064,476 ounces at a cash cost of $3.87/oz. Total production costs increased 16% over the prior-year period to $5.21/oz reflecting higher depreciation costs. Year-to-date the mine has produced 3,129,071 ounces at a cash cost of $3.93/oz, in line with 2003.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>The Company concluded the acquisition of 84% of the <B>Morococha</B> <B>Mine</B> in the third quarter. Morococha produced 694,564 ounces of silver to Pan American&#146;s account in the third quarter at a cash cost of $3.52/oz and a total cost of $4.85/oz. Over the long term the mine is expected to produce an average of 3.5 million ounces of silver annually (100%) at cash costs of less than $3.00/oz.</P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>The <B>Silver Stockpile Operation</B> continued to generate excellent cash flow, producing 231,115 ounces of silver at a cash cost of $2.87/oz during the most recent quarter. &nbsp;Year to date the Company has produced 779,426 ounces from the silver stockpiles at a cash cost of $2.83/oz. The increased cash costs in 2004 reflect a sliding-scale refining charge, which increases as the silver price rises.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify><B>MEXICO</B></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>The <B>La Colorada mine</B> in Mexico increased its third quarter silver production to 441,959 ounces, up from 244,971 ounces in 2003. During the quarter a new mine plan was implemented to reduce dilution, to increase silver grades and to blend ore from clay-rich areas that has been difficult to process. This required more non-production underground development, resulting in high cash costs for the quarter, as planned. Ore grades are now 19% higher and new mining areas have been opened up with lower clay-content ore, increasing recoveries. Cash costs are now expected to decline and silver production to increase steadily. Silver production and cash costs are expected to improve further in 2005 once the sulphide zone returns to production post dewatering.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify>&nbsp;</P>
<P style="margin:0pt" align=center><font size="3">2</font></P>
<hr>
<p style="margin: 0pt" align="justify">&nbsp;</p>
<p style="margin: 0pt" align="justify">&nbsp;</p>
<P style="margin:0pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>Staffing has begun on the <B>Alamo Dorado</B> project in anticipation of a positive feasibility study, now due in February 2005. A power supply has been secured and the design process for the power line&#146;s right-of-way has been initiated. Grindability tests have been completed and a pilot plant is now operating. Construction is expected to begin in 2005.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify><B>ARGENTINA</B></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>The 50% owned <B>Manantial Espejo</B> silver-gold joint venture also progressed significantly in the third quarter. The feasibility study currently underway now envisions a combined open-pit, underground operation to exploit the Maria and Karina Union deposits. Ramped pit designs along with annual production schedules and waste dump designs have been completed. As drilling continues to intersect new vein structures and to expand the two main systems on the property, another 5,000 m of infill and extension drilling has been initiated. Drilling has also begun to secure water for the mine and a number of baseline studies have been completed. Given the ongoing drilling programs, the joint venture will provide a proven and probable reserve with a mine plan upon completion of the feasibility study early in 2005.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify><B>BOLIVIA</B></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>At the <B>San Vicente</B> property, small-scale mining produced 86,704 ounces of silver in the third quarter of the year to Pan American&#146;s account, while the Company continues to move forward with a feasibility study testing the viability of increasing production in 2005. EMUSA, a Bolivian mining company, continues to carry out small-scale contract mining under a site services agreement. </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify><B><U>SILVER MARKETS</U></B></P>
<P style="margin-top:0pt; margin-bottom:4pt"><BR></P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10.5pt" align=justify>The silver price opened the quarter at $5.91/oz, breaking through the $6 level almost immediately and closing at $6.66/oz on September 30, 2004 for an average price of $6.47/oz, approximately the same as the average for the year. &nbsp;The silver price remains very volatile, but has continued to rebound from its second-quarter lows and was up 23% over year-end 2003 as of late October. </P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10.5pt" align=justify>According to Ross Beaty: &#147;Primary factors influencing the silver price today continue to be the US dollar, global industrial production &#150; particularly in the electronics/electrical sector &#150; and investment demand. The underlying demand/supply fundamentals for silver are sound. It is a great time to be one of the world&#146;s major silver producers.&#148;</P>
<P style="margin-top:0pt; margin-bottom:5.25pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10.5pt" align=justify>Pan American will host a conference call to discuss the results on Monday, November 1, 2004 at 11:00 a.m. Pacific time (2:00 p.m. Eastern time). &nbsp;North American participants please call toll-free 1-877-825-5811. International participants please dial 1-973-582-2767. The conference may also be accessed live from the investor relations section of the Pan American website at <B>www.panamericansilver.com</B>. To listen to a playback for one week after the call, dial 1-877-519-4471 and enter the pass code 5270686.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>For More Information, please contact:</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>Brenda Radies, Vice-President Corporate Relations (604) 806-3158</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align=justify>www.panamericansilver.com</P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=center>- End - </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align=justify>CAUTIONARY NOTE</P>
<P style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">Some of the statements in this news release are forward-looking statements, such as estimates of future production levels, expectations regarding mine production costs, expected trends in mineral prices and statements that describe Pan American's future plans, objectives or goals. &nbsp;Actual results and developments may differ materially from those contemplated by these statements depending on such factors as changes in general economic conditions and financial markets, changes in prices for silver and other metals , technological and operational hazards in Pan American's mining and mine development activities, uncertainties inherent in the calculation of mineral reserves, mineral resources and metal recoveries, the timing and availability of financing, governmental and other approvals, political unrest or instability in countries where Pan American is active, labor relations and other risk factors listed from time to time in Pan Ame
rican&#146;s Form 40-F</P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="margin:0pt" align=justify>&nbsp;</P>
<P style="margin:0pt" align=center><font size="3">3</font></P>
<hr>
<p style="margin: 0pt" align="justify">&nbsp;</p>
<p style="margin: 0pt" align="justify">&nbsp;</p>
<P style="margin:0pt; page-break-before:always"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=289.25></TD><TD width=93.05></TD><TD width=75.9></TD></TR>
<TR><TD valign=bottom width=610.933 colspan=3><P style="line-height:16pt; margin:0pt; font-family:Arial; font-size:14pt" align=center><B>PAN AMERICAN SILVER CORP.</B></P>
</TD></TR>
<TR><TD valign=bottom width=610.933 colspan=3><P style="margin:0pt; font-family:Arial" align=center>Consolidated Balance Sheets</P>
</TD></TR>
<TR><TD valign=bottom width=610.933 colspan=3><P style="margin:0pt; font-family:Arial" align=center>(in thousands of US dollars)</P>
</TD></TR>
<TR><TD valign=bottom width=385.667>&nbsp;</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align=right>&nbsp;September 30 </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align=right>&nbsp;December 31 </P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align=right>&nbsp;2004 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align=right>&nbsp;2003 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667>&nbsp;</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align=right>&nbsp;(Unaudited) </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align=right>(Audited)</P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial"><B>ASSETS</B></P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial">(Restated &#150; note 3)</P>
</TD><TD valign=bottom width=101.2>&nbsp;</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Current</P>
</TD><TD valign=bottom width=124.067>&nbsp;</TD><TD valign=bottom width=101.2>&nbsp;</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Cash and cash equivalents</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17,862 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,191 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Short-term investments</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62,977 </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;74,938 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Accounts receivable</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,948 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,545 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Inventories</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,809 </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,612 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Deferred loss on commodity contracts</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>111</P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>-</P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Prepaid expenses</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,599 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,289 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Total Current Assets</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;110,306 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;104,575 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Mineral property, plant and equipment - notes 4 and 5</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;102,315 </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;83,574 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Investment and non-producing properties - note 6</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;121,323 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;83,873 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Direct smelting ore</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,289 </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,901 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Other assets</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,826 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,960 </P>
</TD></TR>
<TR><TD style="border-top:0.5pt solid #000000; border-bottom:3pt double #000000" valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Total Assets</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:3pt double #000000" valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;342,059 </P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:3pt double #000000" valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;279,883 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667>&nbsp;</TD><TD valign=bottom width=124.067>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=101.2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial"><B>LIABILITIES</B></P>
</TD><TD valign=bottom width=124.067>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=101.2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Current</P>
</TD><TD valign=bottom width=124.067>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=101.2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Accounts payable and accrued liabilities</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,435 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,525 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Advances for metal shipments</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,244 </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,536 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Unrealized loss on commodity contracts</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>2,634</P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>-</P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Current portion of bank loans and capital lease</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14</P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,639 </P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Current portion of other non-current liabilities</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;426 </P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,948 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Total Current Liabilities</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,753 </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,648 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Deferred revenue</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;754 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;865 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Bank loans and capital lease</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;332 </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,803 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Liability component of convertible debentures</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;167</P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19,116 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Provision for asset retirement obligation and reclamation</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29,796 </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,192 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Provision for future income tax</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30,073 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19,035 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Non-controlling interest</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,734 </P>
</TD><TD valign=bottom width=101.2><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Severance indemnities and commitments</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,640 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,126 </P>
</TD></TR>
<TR><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Total Liabilities</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;81,249 </P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;95,785 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667>&nbsp;</TD><TD valign=bottom width=124.067>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=101.2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial"><B>SHAREHOLDERS' EQUITY</B></P>
</TD><TD valign=bottom width=124.067>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=101.2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Share capital</P>
</TD><TD valign=bottom width=124.067>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=101.2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Authorized: 100,000,000 common shares with no par value</P>
</TD><TD valign=bottom width=124.067>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=101.2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Issued:</P>
</TD><TD valign=bottom width=124.067>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=101.2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2003 - 53,009,851 common shares</P>
</TD><TD valign=bottom width=124.067>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=101.2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;September 30, 2004 - 66,752,572 common shares</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;380,404 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;225,154 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Equity component of convertible debentures</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;701 </P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;66,735 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Additional paid in capital</P>
</TD><TD valign=bottom width=124.067 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,874 </P>
</TD><TD valign=bottom width=101.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,752 </P>
</TD></TR>
<TR><TD valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Deficit</P>
</TD><TD valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(130,169)</P>
</TD><TD valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(120,543)</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Total Shareholders' Equity</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;260,810 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;184,098 </P>
</TD></TR>
<TR><TD style="border-bottom:3pt double #000000" valign=bottom width=385.667><P style="margin:0pt; font-family:Arial">Total Liabilities and Shareholders' Equity</P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=124.067><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;342,059 </P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=101.2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;279,883 </P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin-top:5pt; margin-bottom:0pt; font-family:Arial">See accompanying notes to consolidated financial statements</P>
<P style="margin-top:5pt; margin-bottom:0pt"><BR>
<BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; page-break-before:always"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin-top:7pt; margin-bottom:0pt"><BR>
<BR></P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=213.35></TD><TD width=65.15></TD><TD width=1.9></TD><TD width=61.7></TD><TD width=5.35></TD><TD width=38.35></TD><TD width=28.7></TD><TD width=67.05></TD></TR>
<TR><TD valign=bottom width=642.067 colspan=8><P style="line-height:16pt; margin:0pt; font-family:Arial; font-size:14pt" align=center><B>PAN AMERICAN SILVER CORP.</B></P>
</TD></TR>
<TR><TD valign=bottom width=642.067 colspan=8><P style="margin:0pt; font-family:Arial" align=center>Consolidated Statements of Operations</P>
</TD></TR>
<TR><TD valign=bottom width=642.067 colspan=8><P style="margin:0pt; font-family:Arial" align=center>(Unaudited - in thousands of US dollars, except per share amounts)</P>
</TD></TR>
<TR><TD valign=bottom width=284.467>&nbsp;</TD><TD valign=bottom width=86.867>&nbsp;</TD><TD valign=bottom width=84.8 colspan=2>&nbsp;</TD><TD valign=bottom width=58.267 colspan=2>&nbsp;</TD><TD valign=bottom width=127.667 colspan=2>&nbsp;</TD></TR>
<TR><TD valign=bottom width=284.467>&nbsp;</TD><TD valign=bottom width=171.667 colspan=3><P style="margin:0pt; font-family:Arial" align=center>Three months ended</P>
</TD><TD valign=bottom width=185.933 colspan=4><P style="margin:0pt; font-family:Arial" align=center>Nine months ended</P>
</TD></TR>
<TR><TD valign=bottom width=284.467>&nbsp;</TD><TD valign=bottom width=171.667 colspan=3><P style="margin:0pt; font-family:Arial" align=center>September 30,</P>
</TD><TD valign=bottom width=185.933 colspan=4><P style="margin:0pt; font-family:Arial" align=center>September 30,</P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align=right>2004&nbsp;<br>
 (Restated &#150; note 3)</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align=right>2003</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align=right>2004&nbsp;<br>
 (Restated &#150; note 3)</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align=right>2003</P>
</TD></TR>
<TR><TD valign=bottom width=284.467>&nbsp;</TD><TD valign=bottom width=89.4 colspan=2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align=right>(Note 2)</P>
</TD><TD valign=bottom width=89.4 colspan=2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align=right>(Note 2)</P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial"><B>Revenue</B></P>
</TD></center><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;27,916 </P>
</TD><center><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;11,890 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;64,803 </P>
</TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;32,265 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial"><B>Expenses</B></P>
</TD><TD valign=bottom width=89.4 colspan=2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Operating</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18,526 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,200 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;46,225 </P>
</TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28,962 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;General and administration</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;934 </P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;565 </P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,939 </P>
</TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,548 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Depreciation and amortization</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,033 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;432 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,186 </P>
</TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,365 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Stock-based compensation</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;518 </P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;835 </P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,642 </P>
</TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,036 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Reclamation</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;302 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;75 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;905 </P>
</TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;231 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Exploration and development</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,213 </P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;600 </P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,878 </P>
</TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,588 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Interest</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;66 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;678 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;823 </P>
</TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,015 </P>
</TD></TR>
<TR><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24,592 </P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,385 </P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62,598 </P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36,745 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">Income (loss) from operations</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,324 </P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,495)</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,205 </P>
</TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4,480)</P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Gain on sale of concessions</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,583 </P>
</TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">Debt settlement expenses</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(53)</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,364)</P>
</TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Non-controlling interest</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(320)</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(320)</P>
</TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">Loss on commodity contracts</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="font-family: Arial; margin: 0pt" align=right>(3,438)</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="font-family: Arial; margin: 0pt" align=right>-</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="font-family: Arial; margin: 0pt" align=right>(3,816)</P>
</TD><TD valign=bottom width=89.4><P style="font-family: Arial; margin: 0pt" align=right>- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">Interest and other income (note 8)</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;845 </P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;270 </P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,399 </P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;508 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">Net income (loss) for the period</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;358 </P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;(1,225)</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;1,687 </P>
</TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;(3,972)</P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Adjustments:</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">Charges relating to conversion of convertible debentures</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8,464)</P>
</TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Convertible debentures issue costs</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,000)</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,000)</P>
</TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">Accretion of convertible debentures</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(975)</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2,838)</P>
</TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(975)</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">Adjusted net income (loss) attributable to common shareholders</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;358 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;(5,200)</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;(9,615)</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;(7,947)</P>
</TD></TR>
<TR><TD valign=bottom width=284.467>&nbsp;</TD><TD valign=bottom width=89.4 colspan=2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Earnings (loss) per share - Basic </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.01 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.10)</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.16)</P>
</TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.16)</P>
</TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; text-indent:112.85pt; font-family:Arial">&nbsp;- Diluted</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.01</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.10)</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.16)</P>
</TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.16)</P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF">
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=284.467><P style="margin:0pt; font-family:Arial">Weighted average number of shares outstanding - Basic</P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;66,660 </P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;52,307 </P>
</TD><TD valign=bottom width=89.4 colspan=2><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;61,947 </P>
</TD><TD valign=bottom width=89.4><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;51,030 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Weighted average number of shares outstanding - Fully Diluted</P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;72,213 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;67,990 </P>
</TD><TD valign=bottom width=89.4 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;67,499 </P>
</TD><TD valign=bottom width=89.4 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;66,714 </P>
</TD></TR>
<TR><TD valign=bottom width=284.467>&nbsp;</TD><TD valign=bottom width=89.4 colspan=2>&nbsp;</TD><TD valign=bottom width=89.4 colspan=2>&nbsp;</TD><TD valign=bottom width=89.4 colspan=2>&nbsp;</TD><TD valign=bottom width=89.4>&nbsp;</TD></TR>
<TR><TD valign=bottom colspan=8><P style="margin:0pt; font-family:Arial" align=right>&nbsp;See accompanying notes to consolidated financial statements </P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="margin:0pt"><BR></P>
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<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; page-break-before:always"><BR></P>
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<div align="center">
  <center>
<TABLE style="font-size: 10pt" cellspacing=0 height="1113"><TR><TD width=230.4 height="18"></TD><TD width=3.8 height="18"></TD><TD width=78.2 height="18"></TD><TD width=21.45 height="18"></TD><TD width=43.75 height="18"></TD><TD width=75.75 height="18"></TD><TD width=3.6 height="18"></TD><TD width=76.55 height="18"></TD></TR>
<TR><TD valign=bottom colspan=8 height="20"><P style="line-height:normal; margin:0pt; font-family:Arial; font-size:11pt" align=center><B>PAN AMERICAN SILVER CORP.</B></P>
</TD></TR>
<TR><TD valign=bottom colspan=8 height="18"><P style="margin:0pt; font-family:Arial" align=center>Consolidated Statements of Cash Flows</P>
</TD></TR>
<TR><TD valign=bottom colspan=8 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>(Unaudited - in thousands of US dollars)</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="18">&nbsp;</TD><TD valign=bottom width=137.933 colspan=3 height="18">&nbsp;</TD><TD valign=bottom width=58.333 height="18">&nbsp;</TD><TD valign=bottom width=101 height="18">&nbsp;</TD><TD valign=bottom width=106.867 colspan=2 height="18">&nbsp;</TD></TR>
<TR><TD valign=bottom width=307.2 height="18">&nbsp;</TD><TD valign=bottom width=196.267 colspan=4 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>Three months ended</P>
</TD><TD valign=bottom width=207.867 colspan=3 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>Nine months ended</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="18">&nbsp;</TD><TD valign=bottom width=196.267 colspan=4 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>September 30,</P>
</TD><TD valign=bottom width=207.867 colspan=3 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>September 30,</P>
</TD></TR>
<TR><TD style="border-bottom: 0.5pt solid #000000" valign=bottom width=307.2 height="33"><P style="margin:0pt; font-family:Arial; font-size:9pt">&nbsp;</P>
</TD><TD style="border-bottom: 0.5pt solid #000000" valign=bottom width=109.333 colspan=2 height="33"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>2004 <BR>
(Restated &#150; note 3)</P>
</TD><TD style="border-bottom: 0.5pt solid #000000" valign=bottom width=86.933 colspan=2 height="33"><P style="line-height:11pt; margin:0pt; padding-right:10.6pt; font-family:Arial; font-size:9pt" align=right>2003 </P>
</TD><TD style="border-bottom: 0.5pt solid #000000" valign=bottom width=105.8 colspan=2 height="33"><P style="line-height:normal; margin:0pt; font-family:Arial; font-size:9pt" align=right>2004<BR>
(Restated &#150; note 3)</P>
</TD><TD style="border-bottom: 0.5pt solid #000000" valign=bottom width=102.067 height="33"><P style="line-height:11pt; margin:0pt; padding-right:20.9pt; font-family:Arial; font-size:9pt" align=right>2003 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="18">&nbsp;</TD><TD valign=bottom width=109.333 colspan=2 height="18">&nbsp;</TD><TD valign=bottom width=86.933 colspan=2 height="18"><P style="line-height:11pt; margin:0pt; padding-right:5.2pt; font-family:Arial; font-size:9pt" align=right><SUP>(Note 2)</SUP></P>
</TD><TD valign=bottom width=105.8 colspan=2 height="18">&nbsp;</TD><TD valign=bottom width=102.067 height="18"><P style="line-height:11pt; margin:0pt; padding-right:15.5pt; font-family:Arial; font-size:9pt" align=right><SUP>(Note 2)</SUP></P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt"><B>Operating activities</B></P>
</TD><TD valign=bottom width=109.333 colspan=2 height="18">&nbsp;</TD><TD valign=bottom width=86.933 colspan=2 height="18">&nbsp;</TD><TD valign=bottom width=105.8 colspan=2 height="18">&nbsp;</TD><TD valign=bottom width=102.067 height="18">&nbsp;</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Net income (loss) for the period</P>
</TD></center><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;358 </P>
</TD><center><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;(1,225)</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;1,687 </P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;(3,972)</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Reclamation expenditures</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(327)</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(919)</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Gain on sale of assets</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(165)</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,583)</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(165)</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Items not involving cash</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=86.933 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=105.8 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=102.067 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Depreciation and amortization</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,033 </P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;432 </P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,186</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,365 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Minority interest</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;320 </P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;320</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Interest accretion on convertible debentures</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;366</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Stock-based compensation</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;518 </P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;835 </P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,642</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,036 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Debt settlement expenses</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,208</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="15"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Compensation expense</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="15"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="15"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="15"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;245 </P>
</TD><TD valign=bottom width=102.067 height="15"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Unrealized loss on commodity contracts</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align=right>2,931</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align=right>2,523</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Asset retirement and reclamation accretion</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;302</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;75 </P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;905</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;231 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Operating cost provisions</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(146)</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;350 </P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;707</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;849 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Changes in non-cash working capital items (note 9)</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6,576)</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(804)</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align=right>(11,772)</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,069)</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=307.2 height="18"><P style="margin:0pt; font-family:Arial; font-size:9pt">&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=109.333 colspan=2 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;413 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=86.933 colspan=2 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(502)</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=105.8 colspan=2 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;515 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=102.067 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2,725)</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="18">&nbsp;</TD><TD valign=bottom width=109.333 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=86.933 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=105.8 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=102.067 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt"><B>Financing activities</B></P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=86.933 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=105.8 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=102.067 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Shares issued for cash</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;812 </P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,940 </P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;61,817 </P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,638 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Shares issue costs</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(180)</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Convertible debentures</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;86,250 </P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;86,250 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Convertible debentures issue costs</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2,993)</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,000)</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Convertible debentures payments</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(22)</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13,542)</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Capital lease repayment</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(75)</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(75)</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(150)</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Proceeds from bank loans</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,000 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Repayment of bank loans</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(406)</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13,021)</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,344)</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=307.2 height="18"><P style="margin:0pt; font-family:Arial; font-size:9pt">&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=109.333 colspan=2 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;790 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=86.933 colspan=2 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;85,716 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=105.8 colspan=2 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34,999 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=102.067 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;95,394 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="18">&nbsp;</TD><TD valign=bottom width=109.333 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=86.933 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=105.8 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=102.067 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt"><B>Investing activities</B></P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=86.933 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=105.8 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=102.067 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Mineral property, plant and equipment expenditures</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2,679)</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,006)</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8,687)</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11,644)</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Investment and non-producing property expenditures</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(434)</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(492)</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(988)</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(869)</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Acquisition of net assets of subsidiary (note 4)</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(36,214)</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(36,214)</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Acquisition of cash of subsidiary</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,393 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Proceeds from sale of assets</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;165 </P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,583 </P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;165 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Proceeds from sale of marketable securities</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,007 </P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,463 </P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Other</P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(180)</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2,000)</P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(60)</P>
</TD></TR>
<TR><TD style="border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=307.2 height="18"><P style="margin:0pt; font-family:Arial; font-size:9pt">&nbsp;</P>
</TD><TD style="border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=109.333 colspan=2 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(37,320)</P>
</TD><TD style="border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=86.933 colspan=2 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,513)</P>
</TD><TD style="border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=105.8 colspan=2 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(31,843)</P>
</TD><TD style="border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=102.067 height="18"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10,015)</P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="18">&nbsp;</TD><TD valign=bottom width=109.333 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=86.933 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=105.8 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=102.067 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=307.2 height="32" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt"><B>(Decrease) increase in cash and cash equivalents during the period</B></P>
</TD><TD valign=bottom width=109.333 colspan=2 height="32" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(36,117)</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="32" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;81,701 </P>
</TD><TD valign=bottom width=105.8 colspan=2 height="32" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,671 </P>
</TD><TD valign=bottom width=102.067 height="32" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;82,654 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt"><B>Cash and cash equivalents, beginning of period</B></P>
</TD><TD valign=bottom width=109.333 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53,979 </P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,138 </P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,191 </P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,185 </P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=307.2 height="20"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt"><B>Cash and cash equivalents, end of period</B></P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=109.333 colspan=2 height="20"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;17,862 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=86.933 colspan=2 height="20"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;92,839 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=105.8 colspan=2 height="20"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;17,862 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=102.067 height="20"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;92,839 </P>
</TD></TR>
<TR><TD valign=bottom width=307.2 height="18">&nbsp;</TD><TD valign=bottom width=109.333 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=86.933 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=105.8 colspan=2 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=102.067 height="18">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=503.467 colspan=5 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt"><B>Supplemental disclosure of non-cash financing and investing activities</B></P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=102.067 height="17">
    <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=312.267 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Shares issued for compensation</P>
</TD><TD valign=bottom width=104.267 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;245 </P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=312.267 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Shares issued for acquisition of subsidiary</P>
</TD><TD valign=bottom width=104.267 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=102.067 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;64,228 </P>
</TD></TR>
<TR><TD valign=bottom width=416.533 colspan=3 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Shares issued for conversion of convertible debentures &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    &nbsp;&nbsp;&nbsp;&nbsp;-</P>
</TD><TD valign=bottom width=86.933 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=105.8 colspan=2 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;88,848 </P>
</TD><TD valign=bottom width=102.067 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=711.333 colspan=8 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>See accompanying notes to consolidated financial statements</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt; font-family:Arial">&nbsp;&nbsp;</P>
<P style="margin:0pt; font-family:Arial">&nbsp;</P>
<P style="margin:0pt; font-family:Arial">&nbsp;</P>
<hr>
<p style="font-family: Arial; margin: 0pt">&nbsp;</p>
<p style="font-family: Arial; margin: 0pt">&nbsp;</p>
<P style="margin:0pt; font-family:Arial">&nbsp;</P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=167.3></TD><TD width=48.65></TD><TD width=11.25></TD><TD width=55.3></TD><TD width=0.7></TD><TD width=53.85></TD><TD width=56.8></TD><TD width=56></TD><TD width=55.3></TD></TR>
<TR><TD valign=bottom width=673.533 colspan=9><P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt" align=center><B>PAN AMERICAN SILVER CORP.</B></P>
</TD></TR>
<TR><TD valign=bottom width=673.533 colspan=9><P style="margin:0pt; font-family:Arial" align=center>Consolidated Statements of Shareholders' Equity</P>
</TD></TR>
<TR><TD valign=bottom width=673.533 colspan=9><P style="margin:0pt; font-family:Arial" align=center>For the nine months ended September 30, 2004</P>
</TD></TR>
<TR><TD valign=bottom width=673.533 colspan=9><P style="margin:0pt; font-family:Arial" align=center>(Unaudited - in thousands of US dollars, except for shares)</P>
</TD></TR>
<TR><TD valign=bottom width=223.067>&nbsp;</TD><TD valign=bottom width=64.867>&nbsp;</TD><TD valign=bottom width=88.733 colspan=2>&nbsp;</TD><TD valign=bottom width=72.733 colspan=2>&nbsp;</TD><TD valign=bottom width=75.733>&nbsp;</TD><TD valign=bottom width=74.667>&nbsp;</TD><TD valign=bottom width=73.733>&nbsp;</TD></TR>
<TR><TD valign=bottom width=223.067>&nbsp;</TD><TD valign=bottom width=64.867>&nbsp;</TD><TD valign=bottom width=88.733 colspan=2>&nbsp;</TD><TD valign=bottom width=72.733 colspan=2>&nbsp;</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;Additional </P>
</TD><TD valign=bottom width=74.667>&nbsp;</TD><TD valign=bottom width=73.733>&nbsp;</TD></TR>
<TR><TD valign=bottom width=223.067>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=153.6 colspan=3><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>Common shares</P>
</TD><TD valign=bottom width=72.733 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>Convertible</P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;Paid in </P>
</TD><TD valign=bottom width=74.667>&nbsp;</TD><TD valign=bottom width=73.733>&nbsp;</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=223.067><P style="margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;Shares </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;Amount </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;Debentures </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;Capital </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;Deficit </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;Total </P>
</TD></TR>
<TR><TD valign=bottom width=223.067>&nbsp;</TD><TD valign=bottom width=79.867 colspan=2>&nbsp;</TD><TD valign=bottom width=74.667 colspan=2>&nbsp;</TD><TD valign=bottom width=71.8>&nbsp;</TD><TD valign=bottom width=75.733>&nbsp;</TD><TD valign=bottom width=74.667>&nbsp;</TD><TD valign=bottom width=73.733>&nbsp;</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Balance, December 31, 2002</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>43,883,454 </P>
</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$ &nbsp;161,108 </P>
</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,327 </P>
</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$(106,943)</P>
</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$ &nbsp;&nbsp;&nbsp;55,492 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Stock-based compensation</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,871 </P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,871 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Exercise of stock options</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;1,385,502 </P>
</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,312 </P>
</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,471)</P>
</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,841 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Exercise of share purchase warrants</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;100,943 </P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;509 </P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;509 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Issued on acquisition of Corner Bay</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF">&nbsp;</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Silver Inc.</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;7,636,659 </P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54,203 </P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;54,203 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Fair value of stock options granted</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,136 </P>
</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,136 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Fair value of share purchase warrants</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,889 </P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,889 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Issue of convertible debentures</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;63,201 </P>
</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;63,201 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Accretion of convertible debentures</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,534 </P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,534)</P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Convertible debentures issue costs</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,272)</P>
</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;(3,272)</P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Issued as compensation</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,293 </P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22 </P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22 </P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Net loss for the year</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;(6,794)</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;(6,794)</P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Balance, December 31, 2003</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>53,009,851 </P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;225,154 </P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;66,735 </P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,752 </P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(120,543)</P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;184,098 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Stock-based compensation</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,642 </P>
</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,642 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Exercise of stock options</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;717,695 </P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;9,313 </P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4,415)</P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,898 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Exercise of share purchase warrants</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;540,026 </P>
</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;2,024 </P>
</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(105)</P>
</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,919 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Shares issued for cash</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;3,333,333 </P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;55,000 </P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;55,000 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Shares issue costs</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;(180)</P>
</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(180)</P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Shares issued on conversion of </P>
</TD><TD valign=bottom width=79.867 colspan=2>&nbsp;</TD><TD valign=bottom width=74.667 colspan=2>&nbsp;</TD><TD valign=bottom width=71.8>&nbsp;</TD><TD valign=bottom width=75.733>&nbsp;</TD><TD valign=bottom width=74.667>&nbsp;</TD><TD valign=bottom width=73.733>&nbsp;</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;convertible debentures</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>9,135,043 </P>
</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;88,848 </P>
</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;(68,883)</P>
</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8,464)</P>
</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,501 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Issued as compensation</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,624 </P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;245 </P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;245 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Accretion of convertible debentures</P>
</TD><TD valign=bottom width=79.867 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 colspan=2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=71.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,849 </P>
</TD><TD valign=bottom width=75.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2,849)</P>
</TD><TD valign=bottom width=73.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Net income for the period (Restated)</P>
</TD><TD valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,687 </P>
</TD><TD valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,687</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=223.067><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Balance, September 30, 2004</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=79.867 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>66,752,572 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=74.667 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$ &nbsp;&nbsp;380,404 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;701 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=75.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,874 </P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=74.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$(130,169)</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 3pt double #000000" valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$ &nbsp;260,810 </P>
</TD></TR>
<TR><TD valign=bottom width=223.067>&nbsp;</TD><TD valign=bottom width=79.867 colspan=2>&nbsp;</TD><TD valign=bottom width=74.667 colspan=2>&nbsp;</TD><TD valign=bottom width=71.8>&nbsp;</TD><TD valign=bottom width=75.733>&nbsp;</TD><TD valign=bottom width=74.667>&nbsp;</TD><TD valign=bottom width=73.733>&nbsp;</TD></TR>
<TR><TD valign=bottom colspan=9><P style="margin:0pt; font-family:Arial" align=right>See accompanying notes to consolidated financial statements</P>
</TD></TR>
</TABLE>
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<P style="margin:0pt; font-family:Arial">&nbsp;</P>
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<P style="margin:0pt"><BR></P>
<P style="margin:0pt" align="center"><font size="3">7</font><BR></P>
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<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt; page-break-before:always">Pan American Silver Corp.</P>
<P style="margin:0pt; font-family:Arial">Notes to consolidated financial statements</P>
<P style="margin:0pt; font-family:Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended</P>
<P style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts)</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Arial; border-bottom:0.5pt solid #000000">(Unaudited) </P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:54pt; text-indent:-36pt; font-family:Arial"><B>1.</B></P>
<P style="margin:0pt; padding-left:54pt; text-indent:-18pt; font-family:Arial"><B>DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS</B></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>Pan American Silver Corp (the &#147;Company&#148;) is engaged in silver mining and related activities, including exploration, extraction, processing, refining and reclamation. &nbsp;The Company has mining operations in Peru, Mexico and Bolivia, project development activities in Argentina, Mexico and Bolivia, and exploration activities in South America.</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial">The Company completed the acquisition of the Morococha mining assets in central Peru (Note 4) with the effective date July 1, 2004.</P>
<P style="margin:0pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:54pt; text-indent:-36pt; font-family:Arial"><B>2.</B></P>
<P style="margin:0pt; padding-left:54pt; text-indent:-18pt; font-family:Arial"><B>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Restated)</B></P>
<P style="margin:0pt"><BR></P>
<P style="line-height:normal; margin:0pt; padding-left:36pt; font-family:Arial" align=justify>These unaudited interim consolidated financial statements are expressed in United<FONT FACE="Times New Roman"> </FONT>States dollars and are prepared in accordance with accounting principles generally accepted in Canada (&#147;Canadian GAAP&#148;), which are more fully described in the annual audited consolidated financial statements for the year ended December 31, 2003 which is included in the Company&#146;s 2003 Annual Report. &nbsp;These statements do not include all of the disclosures required by Canadian GAAP for annual financial statements. &nbsp;Certain comparative figures have been reclassified to conform to the current presentation. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>In management&#146;s opinion, all adjustments necessary for fair presentation have been included in these financial statements.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-18pt; font-family:Arial" align=justify>a)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Arial" align=justify>Stock-based compensation</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:54pt; font-family:Arial" align=justify>During the fourth quarter 2003 the Company changed its accounting policy, retroactive to January 1, 2002, in accordance with recommendation of CICA 3870, &#147;Stock-based Compensation and Other Stock-based Payments&#148;. &nbsp;Under the amended standards of this Section, the fair value of all stock-based awards granted are estimated using the Black-Scholes model and are recorded in operations over their vesting periods.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:54pt; font-family:Arial" align=justify>Previously, the Company used the intrinsic value method for valuing stock-based compensation awards granted to employees, directors and officers where compensation expense was recognized for the excess, if any, of the quoted market price of the Company&#146;s common shares over the common share exercise price on the day that options were granted.</P>
<P style="margin:0pt; padding-left:54pt; font-family:Arial" align=justify>In addition, the Company provided note disclosure of pro forma net loss and pro forma loss per share as if the fair value based method had been used to account for share purchase options granted to employees, directors and officers after January 1, 2002. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:54pt; font-family:Arial" align=justify>Using the fair value method for stock-based compensation, the Company recorded an additional charge to earnings of $1,642,000 for the nine months ended September 30, 2004 (nine months ended September 30, 2003 - $2,036,000) for stock options granted to employees, directors and officers. &nbsp;The fair value of the stock options granted during the nine months ended September 30, 2004 was determined using an option pricing model assuming no dividends were paid, a weighted average volatility of the Company&#146;s share price of 58 per cent, weighted average expected life of 3.5 years and weighted average annual risk free rate of 4.03 per cent.</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt" align=justify><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><font face="Times New Roman">8</font></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
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<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt; page-break-before:always"><FONT FACE="Arial">Pan American Silver Corp.</FONT></P>
<P style="margin:0pt; font-family:Arial">Notes to consolidated financial statements</P>
<P style="margin:0pt; font-family:Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended</P>
<P style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts)</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Arial; border-bottom:0.5pt solid #000000">(Unaudited) </P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-18pt; font-family:Arial" align=justify>b)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Arial" align=justify>Asset retirement obligation</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:54pt; font-family:Arial" align=justify>During the fourth quarter of 2003, the Company changed its accounting policy on a retroactive basis with respect to accounting and reporting for obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and the normal operation of long-lived assets. &nbsp;The Company adopted CICA 3110 &#147;Asset Retirement Obligations&#148; whereby the fair value of the liability is initially recorded and the carrying value of the related asset is increased by the corresponding amount. &nbsp;The liability is accreted to its present value and the capitalized cost is amortized over the useful life of the related asset. &nbsp;The change in accounting policy did not have a significant impact on reported results of operations in any period presented.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:72pt; text-indent:-18pt; font-family:Arial" align=justify>c)</P>
<P style="margin:0pt; padding-left:72pt; font-family:Arial" align=justify>Effective January 1, 2004, the Company adopted the CICA Accounting Guideline 13, Hedging Relationships (&quot;AcG-13&quot;).&nbsp; AcG-13 specifies the conditions under which hedge accounting is appropriate and includes requirements for the identification, documentation and designation of hedging relationships, sets standards for determining hedge effectiveness, and establishes criteria for the discontinuance of hedge accounting.&nbsp; The adoption of AcG-13 had the effect of increasing unrealized loss on commodity contracts and deferred loss on commodity contracts by $1.5 million, as of January 1, 2004. </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Arial" align=justify><B>3.</B></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial" align=justify><B>RESTATEMENT</B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>In 2004, Pan American implemented a hedge accounting policy for the accounting treatment of its base-metal forward contracts program. &nbsp;In the fourth quarter of 2005 it was concluded that the Company&#146;s accounting for its forward contracts for the sale of base metals (lead and zinc) ,its forward contracts for purchasing Mexican pesos with US dollars and its silver fixing contracts do not qualify for hedge accounting under AcG-13, Hedging Relationships. &nbsp;As a result, Pan American has restated its unaudited consolidated financial statements for each quarter from March 31, 2004 to September 30, 2005..</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Pan American is now required to recognize mark-to market valuations of its open forward contract positions through its income at the end of each period. &nbsp;In the past, Pan American had recognized gains, losses, revenues and expenses from its forward contracts in its income only in the period in which they settled. &nbsp;The effects of the change in accounting treatment are summarized in the following tables:</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=171.45></TD><TD width=11.25></TD><TD width=115.7></TD><TD width=7.85></TD><TD width=100.15></TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=169.267 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>&nbsp;As Previously Reported</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>&nbsp;As Restated</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=169.267 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify><B>Consolidated Balance Sheets</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=169.267 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=169.267 colspan=2>&nbsp;</TD><TD valign=top width=144 colspan=2>&nbsp;</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Deferred loss on commodity contracts</P>
</TD><TD valign=top width=15 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=top width=154.267><P style="line-height:11pt; margin:0pt; text-indent:61.1pt; font-family:Arial; font-size:9pt">-</P>
</TD><TD valign=top width=10.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD valign=top width=133.533 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:53.05pt; font-family:Arial; font-size:9pt">111</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Unrealized loss on commodity contracts</P>
</TD><TD valign=top width=15>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=154.267><P style="line-height:11pt; margin:0pt; text-indent:61.1pt; font-family:Arial; font-size:9pt">-</P>
</TD><TD valign=top width=10.467>&nbsp;</TD><TD valign=top width=133.533><P style="line-height:11pt; margin:0pt; text-indent:46.3pt; font-family:Arial; font-size:9pt">2,634</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Deficit</P>
</TD><TD valign=top width=15 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=top width=154.267><P style="line-height:11pt; margin:0pt; text-indent:28.85pt; font-family:Arial; font-size:9pt" align=justify>(127,646)</P>
</TD><TD valign=top width=10.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=133.533 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:31.3pt; font-family:Arial; font-size:9pt" align=justify>(130,169)</P>
</TD></TR>
</TABLE>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><font face="Times New Roman">9</font></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt; page-break-before:always"><FONT FACE="Arial">Pan American Silver Corp.</FONT></P>
<P style="margin:0pt; font-family:Arial">Notes to consolidated financial statements</P>
<P style="margin:0pt; font-family:Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended</P>
<P style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts)</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Arial; border-bottom:0.5pt solid #000000">(Unaudited) </P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size: 10pt" cellspacing=0 align=center height="241"><TR><TD width=169.4 height="18"></TD><TD width=11.15 height="18"></TD><TD width=117.85 height="18"></TD><TD width=7.85 height="18"></TD><TD width=100.15 height="18"></TD></TR>
<TR><TD style="border-right: 0.5pt solid #000000" valign=top width=225.867 height="17">&nbsp;</TD><TD style="border-right: 0.5pt solid #000000" valign=top width=172 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>As Previously Reported</B></P>
</TD><TD valign=top width=144 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>As Restated</B></P>
</TD></TR>
<TR><TD style="border-right: 0.5pt solid #000000" valign=top width=225.867 height="17">&nbsp;</TD><TD style="border-right: 0.5pt solid #000000" valign=top width=172 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Three Month Ended</B></P>
</TD><TD valign=top width=144 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Three Month Ended</B></P>
</TD></TR>
<TR><TD style="border-right: 0.5pt solid #000000" valign=top width=225.867 height="17">&nbsp;</TD><TD style="border-right: 0.5pt solid #000000" valign=top width=172 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30 </B></P>
</TD><TD valign=top width=144 colspan=2 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-right: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=top width=225.867 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify><B>Consolidated Statement of Operations</B></P>
</TD><TD style="border-bottom: 0.5pt solid #000000" valign=top width=14.867 height="17">&nbsp;</TD><TD style="border-right: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=top width=157.133 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD><TD style="border-bottom: 0.5pt solid #000000" valign=top width=10.467 height="17">&nbsp;</TD><TD style="border-bottom: 0.5pt solid #000000" valign=top width=133.533 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD></TR>
<TR><TD style="border-right: 0.5pt solid #000000" valign=top width=225.867 height="18">&nbsp;</TD><TD valign=top width=14.867 height="18">&nbsp;</TD><TD style="border-right: 0.5pt solid #000000" valign=top width=157.133 height="18">&nbsp;</TD><TD valign=top width=10.467 height="18">&nbsp;</TD><TD valign=top width=133.533 height="18">&nbsp;</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867 height="17"><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Revenue</P>
</TD><TD valign=bottom width=14.867 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=157.133 height="17"><P style="line-height:11pt; margin:0pt; text-indent:46.7pt; font-family:Arial; font-size:9pt">27,409</P>
</TD><TD valign=bottom width=10.467 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD valign=bottom width=133.533 height="17" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:38pt; font-family:Arial; font-size:9pt">27,916</P>
</TD></TR>
<TR><TD style="border-right: 0.5pt solid #000000" valign=top width=225.867 height="17"><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Mine operating earnings</P>
</TD><TD width=14.867 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="border-right: 0.5pt solid #000000" width=157.133 height="17"><P style="line-height:11pt; margin:0pt; text-indent:51.2pt; font-family:Arial; font-size:9pt">5,850</P>
</TD><TD width=10.467 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=133.533 height="17"><P style="line-height:11pt; margin:0pt; text-indent:42.5pt; font-family:Arial; font-size:9pt">6,357</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867 height="15"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Loss on commodity contracts</P>
</TD><TD valign=bottom width=14.867 height="15" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=157.133 height="15"><P style="line-height:11pt; margin:0pt; text-indent:68.45pt; font-family:Arial; font-size:9pt" align=justify>-</P>
</TD><TD valign=bottom width=10.467 height="15" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=bottom width=133.533 height="15" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:36.5pt; font-family:Arial; font-size:9pt" align=justify>(3,438)</P>
</TD></TR>
<TR><TD style="border-right: 0.5pt solid #000000" valign=top width=225.867 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Net income for the period</P>
</TD><TD valign=top width=14.867 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right: 0.5pt solid #000000" valign=top width=157.133 height="17"><P style="line-height:11pt; margin:0pt; text-indent:51.2pt; font-family:Arial; font-size:9pt" align=justify>3,289</P>
</TD><TD valign=top width=10.467 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=133.533 height="17"><P style="line-height:11pt; margin:0pt; text-indent:49.25pt; font-family:Arial; font-size:9pt" align=justify>358</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867 height="30"><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Adjusted net earnings for the period attributable to common shareholders</P>
</TD><TD width=14.867 height="30" valign="bottom" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" width=157.133 height="30" valign="bottom"><P style="line-height:11pt; margin:0pt; text-indent:51.2pt; font-family:Arial; font-size:9pt">3,289</P>
</TD><TD width=10.467 height="30" valign="bottom" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=133.533 height="30" valign="bottom" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:49.25pt; font-family:Arial; font-size:9pt">358</P>
</TD></TR>
<TR><TD style="border-right: 0.5pt solid #000000" valign=top width=225.867 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Basic and diluted loss per share</P>
</TD><TD valign=top width=14.867 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right: 0.5pt solid #000000" valign=top width=157.133 height="17"><P style="line-height:11pt; margin:0pt; padding-right:42.95pt; font-family:Arial; font-size:9pt" align=right>0.05</P>
</TD><TD valign=top width=10.467 height="17"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=133.533 height="17"><P style="line-height:11pt; margin:0pt; padding-right:31.25pt; font-family:Arial; font-size:9pt" align=right>0.01</P>
</TD></TR>
</TABLE>
<P style="margin:0pt" align=justify><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=169.4></TD><TD width=11.15></TD><TD width=117.85></TD><TD width=7.85></TD><TD width=100.15></TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>As Previously Reported</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>As Restated</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Nine Month Ended</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Nine Month Ended</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify><B>Consolidated Statement of Operations</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2>&nbsp;</TD><TD valign=top width=144 colspan=2>&nbsp;</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Revenue</P>
</TD><TD valign=bottom width=14.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=157.133><P style="line-height:11pt; margin:0pt; text-indent:41.5pt; font-family:Arial; font-size:9pt">63,510</P>
</TD><TD valign=bottom width=10.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD valign=bottom width=133.533 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:30.05pt; font-family:Arial; font-size:9pt">64,803</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Mine operating earnings</P>
</TD><TD width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="border-right:0.5pt solid #000000" width=157.133><P style="line-height:11pt; margin:0pt; text-indent:41.5pt; font-family:Arial; font-size:9pt">10,099</P>
</TD><TD width=10.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=133.533><P style="line-height:11pt; margin:0pt; text-indent:30.05pt; font-family:Arial; font-size:9pt">11,392</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Loss on commodity contracts</P>
</TD><TD valign=bottom width=14.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=157.133><P style="line-height:11pt; margin:0pt; text-indent:63.25pt; font-family:Arial; font-size:9pt" align=justify>-</P>
</TD><TD valign=bottom width=10.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=bottom width=133.533 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:28.55pt; font-family:Arial; font-size:9pt" align=justify>(3,816)</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Net income for the period</P>
</TD><TD valign=top width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=157.133><P style="line-height:11pt; margin:0pt; text-indent:46pt; font-family:Arial; font-size:9pt" align=justify>4,210</P>
</TD><TD valign=top width=10.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=133.533><P style="line-height:11pt; margin:0pt; text-indent:34.55pt; font-family:Arial; font-size:9pt" align=justify>1,687</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Adjusted net loss for the period attributable to common shareholders</P>
</TD><TD width=14.867 valign="bottom" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" width=157.133 valign="bottom"><P style="line-height:11pt; margin:0pt; text-indent:40pt; font-family:Arial; font-size:9pt">(7,092)</P>
</TD><TD width=10.467 valign="bottom" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=133.533 valign="bottom" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:28.55pt; font-family:Arial; font-size:9pt">(9,615)</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Basic and diluted loss per share</P>
</TD><TD valign=top width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=157.133><P style="line-height:11pt; margin:0pt; padding-right:45.45pt; font-family:Arial; font-size:9pt" align=right>(0.11)</P>
</TD><TD valign=top width=10.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=133.533><P style="line-height:11pt; margin:0pt; padding-right:39.65pt; font-family:Arial; font-size:9pt" align=right>(0.16)</P>
</TD></TR>
</TABLE>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Arial" align=justify><B>4.</B></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial" align=justify><B>ACQUISITION OF MOROCOCHA MINING ASSETS</B></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>In July 2004, the Company acquired 92.0 per cent of the voting shares (80.8 per cent equity interest) of Compania Minera Argentum S.A. (&#147;Argentum&#148;) and 100 per cent of the voting shares of Compania Minera Natividad (&#147;Natividad&#148;) for cash of $35,276,000. &nbsp;Argentum and Natividad assets comprise of the Morococha mining assets, its working capital and surrounding mineral concessions located in central Peru. &nbsp;The Company subsequently acquired an additional 3.0 per cent equity interest in Argentum by acquiring 25 per cent its outstanding non-voting investment shares for a cash payment of $844,000.</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>The acquisition was accounted for by the purchase method of accounting and the accounts of Argentum and Natividad have been consolidated from July 1, 2004, which was the date the Company acquired effective control and ownership of the assets and liabilities of the Morococha mine.</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><font face="Times New Roman">10</font></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt; page-break-before:always"><FONT FACE="Arial">Pan American Silver Corp.</FONT></P>
<P style="margin:0pt; font-family:Arial">Notes to consolidated financial statements</P>
<P style="margin:0pt; font-family:Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended</P>
<P style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts)</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Arial; border-bottom:0.5pt solid #000000">(Unaudited) </P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; text-indent:-36pt; font-family:Arial">The fair value of assets and liabilities acquired and the consideration paid are summarized as follows:</P>
<P style="margin:0pt"><BR></P>
<div align="center">
  <center>

<TABLE border=0 width=75% cellspacing=0 cellpadding=0>
<TR valign="bottom">
	<TD width=82% nowrap align=left style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">Current assets, including cash of &#36;657</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">&#36;</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">7,945</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left>
<FONT size=2 face="sans-serif">Plant and equipment</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left>
&nbsp;
	</TD>
	<TD width=12% nowrap align=right>
<FONT size=2 face="sans-serif">7,053</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left style="background-color: #E6E9FF; border-bottom: 1 solid #000000">
<FONT size=2 face="sans-serif">Mineral properties</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left style="background-color: #E6E9FF; border-bottom: 1 solid #000000">
&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="background-color: #E6E9FF; border-bottom: 1 solid #000000">
<FONT size=2 face="sans-serif">46,158</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left>
&nbsp;
	</TD>
	<TD width=5% nowrap align=left>
&nbsp;
	</TD>
	<TD width=12% nowrap align=right>
<FONT size=2 face="sans-serif">61,156</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left>
<FONT size=2 face="sans-serif">Less:</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left>
&nbsp;
	</TD>
	<TD width=12% nowrap align=right>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left style="background-color: #E6E9FF">
 &nbsp; &nbsp;<FONT size=2 face="sans-serif">Accounts payable and accrued liabilities</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left style="background-color: #E6E9FF">
&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">(3,215)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left>
 &nbsp; &nbsp;<FONT size=2 face="sans-serif">Non-controlling interest</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left>
&nbsp;
	</TD>
	<TD width=12% nowrap align=right>
<FONT size=2 face="sans-serif">(1,414)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left style="background-color: #E6E9FF">
 &nbsp; &nbsp;<FONT size=2 face="sans-serif">Provision for asset retirement obligation and reclamation</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left style="background-color: #E6E9FF">
&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">(8,618)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left style="border-bottom: 1 solid #000000">
 &nbsp; &nbsp;<FONT size=2 face="sans-serif">Future income tax liability</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left style="border-bottom: 1 solid #000000">
&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="border-bottom: 1 solid #000000">
<FONT size=2 face="sans-serif">(11,038)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left style="background-color: #E6E9FF; border-bottom-style: double; border-bottom-color: #000000">
<FONT size=2 face="sans-serif">Total purchase price</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left style="background-color: #E6E9FF; border-bottom-style: double; border-bottom-color: #000000">
<FONT size=2 face="sans-serif">&#36;</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="background-color: #E6E9FF; border-bottom-style: double; border-bottom-color: #000000">
<FONT size=2 face="sans-serif">36,871</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left>
<FONT size=2 face="sans-serif">Consideration paid is as follow:</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left>
&nbsp;
	</TD>
	<TD width=12% nowrap align=right>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left style="background-color: #E6E9FF">
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Cash</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">&#36;</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">36,120</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left style="border-bottom: 1 solid #000000">
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Acquisition costs</FONT>&nbsp;
	</TD>
	<TD width=5% nowrap align=left style="border-bottom: 1 solid #000000">
&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="border-bottom: 1 solid #000000">
<FONT size=2 face="sans-serif">751</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=82% nowrap align=left style="background-color: #E6E9FF; border-bottom-style: double; border-bottom-color: #000000">
&nbsp;
	</TD>
	<TD width=5% nowrap align=left style="background-color: #E6E9FF; border-bottom-style: double; border-bottom-color: #000000">
<FONT size=2 face="sans-serif">&#36;</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="background-color: #E6E9FF; border-bottom-style: double; border-bottom-color: #000000">
<FONT size=2 face="sans-serif">36,871</FONT>&nbsp;
	</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial">The final allocation of the consideration among the assets and liabilities of the Morococha Mine may vary from those shown above.</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>The purchase consideration for the mining assets of Argentum and Natividad exceeded the carrying value of the underlying assets for tax purposes by $28,176,000. In addition, the Company recorded a provision for future reclamation and restoration costs in amount of $8,618,000. &nbsp;These amounts have been applied to increase the carrying value of the mineral properties for accounting purposes. &nbsp;However, this did not increase the carrying value of the underlying assets for tax purposes and resulted in a temporary difference between accounting and tax value. The resulting estimated future income tax liability associated with this temporary difference of $11,038,000 was also applied to increase the carrying value of the mineral properties.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><font face="Times New Roman">11</font></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt; page-break-before:always"><FONT FACE="Arial">Pan American Silver Corp.</FONT></P>
<P style="margin:0pt; font-family:Arial">Notes to consolidated financial statements</P>
<P style="margin:0pt; font-family:Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended</P>
<P style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts)</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Arial; border-bottom:0.5pt solid #000000">(Unaudited) </P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-36pt; font-family:Arial" align=justify><B>5.</B></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify><B>MINERAL PROPERTY, PLANT AND EQUIPMENT</B></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial">Mineral property, plant and equipment consist of:</P>
<P style="margin:0pt" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=127.3></TD><TD width=62.5></TD><TD width=54.75></TD><TD width=54></TD><TD width=4.6></TD><TD width=54.75></TD><TD width=59.4></TD><TD width=54></TD></TR>
<TR><TD valign=bottom width=169.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=228.333 colspan=3><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=center><FONT FACE="Arial">September 30, 2004</FONT></P>
</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=224.2 colspan=3><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=center>December 31, 2003</P>
</TD></TR>
<TR><TD valign=bottom width=169.733>&nbsp;</TD><TD valign=bottom width=83.333>&nbsp;</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=center>Accumulated</P>
</TD><TD valign=bottom width=72>&nbsp;</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD valign=bottom width=73>&nbsp;</TD><TD valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=center>Accumulated</P>
</TD><TD valign=bottom width=72>&nbsp;</TD></TR>
<TR><TD valign=bottom width=169.733>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=83.333><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=center>Cost</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=center>Amortization</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=center>Net</P>
</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=center>Cost</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=center>Amortization</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=center>Net</P>
</TD></TR>
<TR><TD valign=bottom width=628.4 colspan=8><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">Mineral properties</P>
</TD></TR>
<TR><TD valign=bottom width=169.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Morococha mine, Peru</P>
</TD><TD valign=bottom width=83.333 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$9,693&nbsp;</P>
</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$(636)</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$9,057&nbsp;</P>
</TD><TD valign=bottom width=6.133 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=79.2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;La Colorada mine, Mexico</P>
</TD><TD valign=bottom width=83.333><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;4,153&nbsp;</P>
</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(303)</P>
</TD><TD valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;3,850&nbsp;</P>
</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;4,153&nbsp;</P>
</TD><TD valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;4,153&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Huaron mine, Peru</P>
</TD><TD valign=bottom width=83.333 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;1&nbsp;</P>
</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;1&nbsp;</P>
</TD><TD valign=bottom width=6.133 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;1&nbsp;</P>
</TD><TD valign=bottom width=79.2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;1&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=83.333><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;13,847&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(939)</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;12,908&nbsp;</P>
</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;4,154&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;4,154&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733>&nbsp;</TD><TD valign=bottom width=83.333>&nbsp;</TD><TD valign=bottom width=73>&nbsp;</TD><TD valign=bottom width=72>&nbsp;</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD valign=bottom width=73>&nbsp;</TD><TD valign=bottom width=79.2>&nbsp;</TD><TD valign=bottom width=72>&nbsp;</TD></TR>
<TR><TD valign=bottom width=628.4 colspan=8><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">Plant and equipment</P>
</TD></TR>
<TR><TD valign=bottom width=169.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Morococha mine, Peru</P>
</TD><TD valign=bottom width=83.333 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;7,053&nbsp;</P>
</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(463)</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;6,590&nbsp;</P>
</TD><TD valign=bottom width=6.133 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=79.2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;La Colorada mine, Mexico</P>
</TD><TD valign=bottom width=83.333><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;10,850&nbsp;</P>
</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(792)</P>
</TD><TD valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;10,058&nbsp;</P>
</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;10,332&nbsp;</P>
</TD><TD valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(360)</P>
</TD><TD valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;9,972&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Huaron mine, Peru</P>
</TD><TD valign=bottom width=83.333 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;14,417&nbsp;</P>
</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(4,423)</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;9,994&nbsp;</P>
</TD><TD valign=bottom width=6.133 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;14,417&nbsp;</P>
</TD><TD valign=bottom width=79.2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(3,426)</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;10,991&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Quiruvilca mine, Peru</P>
</TD><TD valign=bottom width=83.333><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;15,410&nbsp;</P>
</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(15,410)</P>
</TD><TD valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;15,410&nbsp;</P>
</TD><TD valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(15,410)</P>
</TD><TD valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Other</P>
</TD><TD valign=bottom width=83.333 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;3,257&nbsp;</P>
</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(559)</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;2,698&nbsp;</P>
</TD><TD valign=bottom width=6.133 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;3,161&nbsp;</P>
</TD><TD valign=bottom width=79.2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(503)</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;2,658&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=83.333><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;50,987&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(21,647)</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;29,340&nbsp;</P>
</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;43,320&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(19,699)</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;23,621&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733>&nbsp;</TD><TD valign=bottom width=83.333>&nbsp;</TD><TD valign=bottom width=73>&nbsp;</TD><TD valign=bottom width=72>&nbsp;</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD valign=bottom width=73>&nbsp;</TD><TD valign=bottom width=79.2>&nbsp;</TD><TD valign=bottom width=72>&nbsp;</TD></TR>
<TR><TD valign=bottom width=628.4 colspan=8><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">Mine development and others</P>
</TD></TR>
<TR><TD valign=bottom width=169.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Morococha mine, Peru</P>
</TD><TD valign=bottom width=83.333 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;502&nbsp;</P>
</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(33)</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;469&nbsp;</P>
</TD><TD valign=bottom width=6.133 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=79.2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;La Colorada mine, Mexico</P>
</TD><TD valign=bottom width=83.333><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;35,846&nbsp;</P>
</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(2,615)</P>
</TD><TD valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;33,231&nbsp;</P>
</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;31,892&nbsp;</P>
</TD><TD valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(1,113)</P>
</TD><TD valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;30,779&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Huaron mine, Peru</P>
</TD><TD valign=bottom width=83.333 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;36,333&nbsp;</P>
</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(10,071)</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;26,262&nbsp;</P>
</TD><TD valign=bottom width=6.133 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=73 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;32,820&nbsp;</P>
</TD><TD valign=bottom width=79.2 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(7,800)</P>
</TD><TD valign=bottom width=72 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;25,020&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;Quiruvilca mine, Peru</P>
</TD><TD valign=bottom width=83.333><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;10,151&nbsp;</P>
</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(10,046)</P>
</TD><TD valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;105&nbsp;</P>
</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;10,046&nbsp;</P>
</TD><TD valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(10,046)</P>
</TD><TD valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733 style="background-color: #E6E9FF">&nbsp;</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=83.333><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;82,832&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(22,765)</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;60,067&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=6.133><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;74,758&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;(18,959)</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;55,799&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=169.733>&nbsp;</TD><TD valign=bottom width=83.333>&nbsp;</TD><TD valign=bottom width=73>&nbsp;</TD><TD valign=bottom width=72>&nbsp;</TD><TD valign=bottom width=6.133>&nbsp;</TD><TD valign=bottom width=73>&nbsp;</TD><TD valign=bottom width=79.2>&nbsp;</TD><TD valign=bottom width=72>&nbsp;</TD></TR>
<TR><TD valign=bottom width=169.733 style="background-color: #E6E9FF">&nbsp;</TD><TD style="background-color: #E6E9FF; border-bottom: 2pt double #000000" valign=bottom width=83.333><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$147,666&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 2pt double #000000" valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$(45,351)</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 2pt double #000000" valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$102,315&nbsp;</P>
</TD><TD valign=bottom width=6.133 style="background-color: #E6E9FF">&nbsp;</TD><TD style="background-color: #E6E9FF; border-bottom: 2pt double #000000" valign=bottom width=73><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$122,232&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 2pt double #000000" valign=bottom width=79.2><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$(38,658)</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 2pt double #000000" valign=bottom width=72><P style="line-height:11pt; margin:0pt; text-indent:9pt; font-family:Arial; font-size:9pt" align=right>&nbsp;$83,574&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>The Company completed the purchase of 83.78 per cent equity interest in Compania Minera Argentum S.A. and 100 per cent equity interest in Compania Minera Natividad for $36,871,000 (Note 4).</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Arial"><B>6.</B></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial"><B>INVESTMENT AND OTHER NON-PRODUCING PROPERTIES</B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>Acquisition costs of mineral development properties together with costs directly related to mine development expenditures are deferred. &nbsp;Exploration expenditures on investment properties are charged to operations in the period they are incurred.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><font face="Times New Roman">12</font></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt; page-break-before:always"><FONT FACE="Arial">Pan American Silver Corp.</FONT></P>
<P style="margin:0pt; font-family:Arial">Notes to consolidated financial statements</P>
<P style="margin:0pt; font-family:Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended</P>
<P style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts)</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Arial; border-bottom:0.5pt solid #000000">(Unaudited) </P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Investment and non-producing properties consist of:<BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=220.6></TD><TD width=54></TD><TD width=68.65></TD><TD width=68.65></TD></TR>
<TR><TD valign=bottom colspan=3><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right><FONT FACE="Arial">September
    30</FONT></P>
</TD><TD valign=bottom width=91.533>
    <p align="right">&nbsp;<FONT FACE="Arial">December 31</FONT></p>
  </TD></TR>
<TR><TD valign=bottom width=294.133>&nbsp;</TD><TD valign=bottom width=72>&nbsp;</TD><TD valign=bottom><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>2004</P>
</TD><TD valign=bottom width=91.533><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>2003</P>
</TD></TR>
<TR><TD valign=bottom width=549.2 colspan=4><P style="margin:0pt; padding-left:36pt; font-family:Arial">Non-producing properties</P>
</TD></TR>
<TR><TD valign=bottom width=366.133 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial">&nbsp;&nbsp;Morococha, Peru</P>
</TD><TD valign=bottom width=91.533 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;$36,465&nbsp;</P>
</TD><TD valign=bottom width=91.533 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;$- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=366.133 colspan=2><P style="margin:0pt; padding-left:36pt; font-family:Arial">&nbsp;&nbsp;Alamo Dorado, Mexico</P>
</TD><TD valign=bottom width=91.533><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;81,061&nbsp;</P>
</TD><TD valign=bottom width=91.533><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;80,076&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=366.133 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial">&nbsp;&nbsp;Manantial Espejo, Argentina</P>
</TD><TD valign=bottom width=91.533 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;2,012&nbsp;</P>
</TD><TD valign=bottom width=91.533 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;2,012&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=294.133>&nbsp;</TD><TD valign=bottom width=72>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=91.533><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;119,538&nbsp;</P>
</TD><TD style="border-top:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=bottom width=91.533><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;82,088&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=294.133>&nbsp;</TD><TD valign=bottom width=72>&nbsp;</TD><TD valign=bottom width=91.533>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=91.533>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=549.2 colspan=4><P style="margin:0pt; padding-left:36pt; font-family:Arial">Investment properties</P>
</TD></TR>
<TR><TD valign=bottom width=366.133 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial">&nbsp;&nbsp;Waterloo, USA</P>
</TD><TD valign=bottom width=91.533 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;1,000&nbsp;</P>
</TD><TD valign=bottom width=91.533 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;1,000&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=366.133 colspan=2><P style="margin:0pt; padding-left:36pt; font-family:Arial">&nbsp;&nbsp;Tres Cruces, Hog Heaven and others</P>
</TD><TD valign=bottom width=91.533><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;785&nbsp;</P>
</TD><TD valign=bottom width=91.533><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;785&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=294.133 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=72 style="background-color: #E6E9FF">&nbsp;</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=91.533><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;1,785&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign=bottom width=91.533><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;1,785&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=294.133>&nbsp;</TD><TD valign=bottom width=72>&nbsp;</TD><TD valign=bottom width=91.533>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD><TD valign=bottom width=91.533>
    <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </TD></TR>
<TR><TD valign=bottom width=294.133 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=72 style="background-color: #E6E9FF">&nbsp;</TD><TD style="background-color: #E6E9FF; border-bottom: 2pt double #000000" valign=bottom width=91.533><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;$121,323&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 2pt double #000000" valign=bottom width=91.533><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;$83,873&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0pt" align=center><BR><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Arial"><B>7.</B></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial"><B>SHARE CAPITAL</B></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial" align=justify>During the nine-month period ended September 30, 2004, the Company:</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:54pt; text-indent:-18pt; font-family:Arial" align=justify>i)</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; font-family:Arial" align=justify>issued 9,135,043 common shares at a value of $88,848,000 to the holders of $85,431,000 principal amount, senior subordinated convertible debentures on conversion;</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:54pt; text-indent:-18pt; font-family:Arial" align=justify>ii)</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; font-family:Arial" align=justify>issued 3,333,333 common shares at $16.50 per share, for net proceeds of $54,820,000;</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:54pt; text-indent:-18pt; font-family:Arial" align=justify>iii)</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; font-family:Arial" align=justify>issued 717,695 common shares for proceeds of $4,898,000 in connection with the exercise of employees and directors stock options; </P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:54pt; text-indent:-18pt; font-family:Arial" align=justify>iv)</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; font-family:Arial" align=justify>issued 540,026 common shares for proceeds of $1,919,000 in connection with the exercise of share purchase warrants; and</P>
<P style="margin-top:0pt; margin-bottom:-12pt; padding-left:54pt; text-indent:-18pt; font-family:Arial" align=justify>v)</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:54pt; font-family:Arial" align=justify>issued 16,624 common shares at a value of $245,000 as compensation expense.</P>
<P style="margin-top:0pt; margin-bottom:5pt; padding-left:36pt; font-family:Arial" align=justify>The following table summarizes information concerning stock options outstanding as at September 30, 2004:</P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><FONT FACE="Times New Roman">13</FONT></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt; page-break-before:always"><FONT FACE="Arial">Pan American Silver Corp.</FONT></P>
<P style="margin:0pt; font-family:Arial">Notes to consolidated financial statements</P>
<P style="margin:0pt; font-family:Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended</P>
<P style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts)</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Arial; border-bottom:0.5pt solid #000000">(Unaudited) </P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=87.4></TD><TD width=38.6></TD><TD width=81></TD><TD width=63></TD><TD width=81></TD><TD width=63></TD></TR>
<TR><TD valign=top width=116.533>&nbsp;</TD><TD valign=top width=51.467>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" width=192 colspan=2><P style="margin:0pt; font-family:Arial" align=center>Options Outstanding</P>
</TD><TD style="border-bottom:0.5pt solid #000000" width=192 colspan=2><P style="margin:0pt; font-family:Arial" align=center>Options Exercisable</P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=116.533><P style="margin:0pt; font-family:Arial" align=center>Range of Exercise Prices</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=51.467><P style="margin:0pt; font-family:Arial" align=center>Year of Expiry</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=108><P style="margin:0pt; font-family:Arial" align=center>Number Outstanding as at September 30, 2004</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=84><P style="margin:0pt; font-family:Arial" align=center>Weighted Average Remaining Contractual Life (months)</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=108><P style="margin:0pt; font-family:Arial" align=center>Number Exercisable as at September 30, 2004</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=84><P style="margin:0pt; font-family:Arial" align=center>Weighted Average Exercise Price</P>
</TD></TR>
<TR><TD valign=bottom width=116.533 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$3.61</P>
</TD><TD valign=bottom width=51.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>2004</P>
</TD><TD valign=bottom width=108 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>36</P>
</TD><TD valign=bottom width=84 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;.07</P>
</TD><TD valign=bottom width=108 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>36</P>
</TD><TD valign=bottom width=84 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>$3.61</P>
</TD></TR>
<TR><TD valign=top width=116.533><P style="margin:0pt; font-family:Arial" align=center>$9.51</P>
</TD><TD valign=top width=51.467><P style="margin:0pt; font-family:Arial" align=center>2005</P>
</TD><TD valign=top width=108><P style="font-family: Arial; margin: 0pt" align=right>48,077</P>
</TD><TD valign=top width=84><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;5.03</P>
</TD><TD valign=top width=108><P style="font-family: Arial; margin: 0pt" align=right>48,077</P>
</TD><TD valign=top width=84><P style="font-family: Arial; margin: 0pt" align=right>$9.51</P>
</TD></TR>
<TR><TD valign=top width=116.533 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$3.96 - $7.73</P>
</TD><TD valign=top width=51.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>2006</P>
</TD><TD valign=top width=108 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>124,666</P>
</TD><TD valign=top width=84 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;19.42</P>
</TD><TD valign=top width=108 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>88,000</P>
</TD><TD valign=top width=84 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>$5.07</P>
</TD></TR>
<TR><TD valign=top width=116.533><P style="margin:0pt; font-family:Arial" align=center>$7.93 - $8.01</P>
</TD><TD valign=top width=51.467><P style="margin:0pt; font-family:Arial" align=center>2007</P>
</TD><TD valign=top width=108><P style="font-family: Arial; margin: 0pt" align=right>385,000</P>
</TD><TD valign=top width=84><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;37.83</P>
</TD><TD valign=top width=108><P style="font-family: Arial; margin: 0pt" align=right>351,000</P>
</TD><TD valign=top width=84><P style="font-family: Arial; margin: 0pt" align=right>$7.95</P>
</TD></TR>
<TR><TD valign=top width=116.533 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$7.05 - $11.44</P>
</TD><TD valign=top width=51.467 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>2008</P>
</TD><TD valign=top width=108 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>494,231</P>
</TD><TD valign=top width=84 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;45.44</P>
</TD><TD valign=top width=108 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>169,231</P>
</TD><TD valign=top width=84 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt" align=right>$7.93</P>
</TD></TR>
<TR><TD valign=top width=116.533><P style="margin:0pt; font-family:Arial" align=center>$13.08 - $17.84</P>
</TD><TD valign=top width=51.467><P style="margin:0pt; font-family:Arial" align=center>2009</P>
</TD><TD valign=top width=108><P style="font-family: Arial; margin: 0pt" align=right>382,000</P>
</TD><TD valign=top width=84><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;53.31</P>
</TD><TD valign=top width=108><P style="font-family: Arial; margin: 0pt" align=right>142,000</P>
</TD><TD valign=top width=84><P style="font-family: Arial; margin: 0pt" align=right>$15.58</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=116.533><P style="margin:0pt; font-family:Arial" align=center>$3.96</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=51.467><P style="margin:0pt; font-family:Arial" align=center>2010</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=108><P style="font-family: Arial; margin: 0pt" align=right>217,000</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=84><P style="font-family: Arial; margin: 0pt" align=right>&nbsp;74.53</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=108><P style="font-family: Arial; margin: 0pt" align=right>217,000</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=84><P style="font-family: Arial; margin: 0pt" align=right>$3.96</P>
</TD></TR>
<TR><TD style="border-bottom:2pt double #000000" valign=bottom width=116.533>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=51.467>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=108><P style="margin:0pt; font-family:Arial" align=right>1,651,010</P>
</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=84><P style="font-family: Arial; margin: 0pt" align=right>49.01</P>
</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=108><P style="margin:0pt; font-family:Arial" align=right>1,015,344</P>
</TD><TD style="border-bottom:2pt double #000000" valign=bottom width=84><P style="margin:0pt; font-family:Arial" align=right>$9.01</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>During the nine months ended September 30, 2004, the Company recognized $1,642,000 of stock compensation expense consisting of $831,000 for options issued in 2004 and $811,000 for options issued in 2003.</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>As at September 30, 2004 there were warrants outstanding to allow the holders to purchase 3,814,470 common shares of the Company at Cdn$12.00 per share, which expire on February 20, 2008.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>Subsequent to September 30, 2004, the Company issued 7,000 common shares for proceeds of $63,600 pursuant to exercise of employee stock options.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Arial"><B>8.</B></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial"><B>INTEREST AND OTHER INCOME</B></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial">Interest and other income consist of:</P>
<P style="margin:0pt"><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=187.45></TD><TD width=64></TD><TD width=63.25></TD><TD width=13.1></TD><TD width=63.25></TD><TD width=63.25></TD></TR>
<TR><TD valign=bottom width=249.933>&nbsp;</TD><TD valign=bottom colspan="2"><P style="font-family: Arial; margin: 0pt" align=center>Three months&nbsp;</P>
</TD><TD valign=bottom>
    <p style="font-family: Arial; margin: 0pt" align="center">&nbsp;</p>
  </TD><TD valign=bottom colspan="2"><P style="font-family: Arial; margin: 0pt" align=center>Nine months&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=249.933>&nbsp;</TD><TD valign=bottom colspan="2"><P style="font-family: Arial; margin: 0pt" align=center>ended&nbsp;</P>
</TD><TD valign=bottom>
    <p style="font-family: Arial; margin: 0pt" align="center">&nbsp;</p>
  </TD><TD valign=bottom colspan="2"><P style="font-family: Arial; margin: 0pt" align=center>ended&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=249.933>&nbsp;</TD><TD style="border-bottom: 1 solid #000000" valign=bottom colspan="2"><P style="font-family: Arial; margin: 0pt" align=center>September 30,&nbsp;</P>
</TD><TD valign=bottom>
    <p style="font-family: Arial; margin: 0pt" align="center">&nbsp;</p>
  </TD><TD style="border-bottom: 1 solid #000000" valign=bottom colspan="2"><P style="font-family: Arial; margin: 0pt" align=center>September 30,</P>
</TD></TR>
<TR><TD valign=bottom width=249.933>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=85.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>2004</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>2003</P>
</TD><TD valign=bottom width=17.467>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>2004</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>2003</P>
</TD></TR>
<TR><TD valign=bottom width=249.933>&nbsp;</TD><TD valign=bottom width=85.333>&nbsp;</TD><TD valign=bottom width=84.333>&nbsp;</TD><TD valign=bottom width=17.467>&nbsp;</TD><TD valign=bottom width=84.333>&nbsp;</TD><TD valign=bottom width=84.333>&nbsp;</TD></TR>
<TR><TD valign=bottom width=249.933 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt">Revenue from third party</P>
</TD><TD valign=bottom width=85.333 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$554&nbsp;</P>
</TD><TD valign=bottom width=84.333 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$239&nbsp;</P>
</TD><TD valign=bottom width=17.467 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=84.333 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$780&nbsp;</P>
</TD><TD valign=bottom width=84.333 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$546&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=249.933><P style="font-family: Arial; margin: 0pt">Power credits</P>
</TD><TD valign=bottom width=85.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;25&nbsp;</P>
</TD><TD valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;14&nbsp;</P>
</TD><TD valign=bottom width=17.467>&nbsp;</TD><TD valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;111&nbsp;</P>
</TD><TD valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;42&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=249.933 style="background-color: #E6E9FF"><P style="font-family: Arial; margin: 0pt">Gain on sale of marketable securities</P>
</TD><TD valign=bottom width=85.333 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;226&nbsp;</P>
</TD><TD valign=bottom width=84.333 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD><TD valign=bottom width=17.467 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=bottom width=84.333 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;475&nbsp;</P>
</TD><TD valign=bottom width=84.333 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=249.933><P style="font-family: Arial; margin: 0pt">Other revenue and expenses</P>
</TD><TD valign=bottom width=85.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;40&nbsp;</P>
</TD><TD valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;17&nbsp;</P>
</TD><TD valign=bottom width=17.467>&nbsp;</TD><TD valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;33&nbsp;</P>
</TD><TD valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;(80)</P>
</TD></TR>
<TR><TD valign=bottom width=249.933 style="background-color: #E6E9FF">&nbsp;</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 2pt double #000000" valign=bottom width=85.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$845&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 2pt double #000000" valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$270&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 2pt double #000000" valign=bottom width=17.467><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 2pt double #000000" valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$1,399&nbsp;</P>
</TD><TD style="background-color: #E6E9FF; border-top: 0.5pt solid #000000; border-bottom: 2pt double #000000" valign=bottom width=84.333><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$508&nbsp;</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><FONT FACE="Times New Roman">14</FONT></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt; page-break-before:always"><FONT FACE="Arial">Pan American Silver Corp.</FONT></P>
<P style="margin:0pt; font-family:Arial">Notes to consolidated financial statements</P>
<P style="margin:0pt; font-family:Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended</P>
<P style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts)</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Arial; border-bottom:0.5pt solid #000000">(Unaudited) </P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Arial" align=justify><B>9.</B></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial" align=justify><B>SUPPLEMENTAL CASH FLOW INFORMATION</B></P>
<P style="margin:0pt" align=justify><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=192.1></TD><TD width=60.95></TD><TD width=60.95></TD><TD width=60.95></TD><TD width=60.95></TD></TR>
<TR><TD valign=bottom width=256.133>&nbsp;</TD><TD valign=bottom width=162.533 colspan=2><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=center>Three months ended</P>
</TD><TD valign=bottom width=162.533 colspan=2><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=center>Nine months ended</P>
</TD></TR>
<TR><TD valign=bottom width=256.133>&nbsp;</TD><TD valign=bottom width=162.533 colspan=2><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=center>September 30,</P>
</TD><TD valign=bottom width=162.533 colspan=2><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=center>September 30,</P>
</TD></TR>
<TR><TD valign=bottom width=256.133>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=81.267><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>2004</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=81.267><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>2003</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=81.267><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>2004</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=81.267><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>2003</P>
</TD></TR>
<TR><TD valign=bottom colspan=5 style="padding-left: 0"><P style="font-family: Arial; margin: 0pt">Changes in non-cash working capital</P>
</TD></TR>
<TR><TD valign=bottom style="background-color: #E6E9FF; padding-left: 0"><P style="font-family: Arial; margin: 0pt">&nbsp;&nbsp;Short-term investments</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;$(475)</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;$- &nbsp;&nbsp;</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;$(475)</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;$- &nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom style="padding-left: 0"><P style="font-family: Arial; margin: 0pt">&nbsp;&nbsp;Accounts receivable</P>
</TD><TD valign=bottom style="padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(2,270)</P>
</TD><TD valign=bottom style="padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;1,032&nbsp;</P>
</TD><TD valign=bottom style="padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(5,047)</P>
</TD><TD valign=bottom style="padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(695)</P>
</TD></TR>
<TR><TD valign=bottom style="background-color: #E6E9FF; padding-left: 0"><P style="font-family: Arial; margin: 0pt">&nbsp;&nbsp;Inventories</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(212)</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;229&nbsp;</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;803&nbsp;</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(1,807)</P>
</TD></TR>
<TR><TD valign=bottom style="padding-left: 0"><P style="font-family: Arial; margin: 0pt">&nbsp;&nbsp;Prepaids expenses</P>
</TD><TD valign=bottom style="padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(1,260)</P>
</TD><TD valign=bottom style="padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;44&nbsp;</P>
</TD><TD valign=bottom style="padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(1,241)</P>
</TD><TD valign=bottom style="padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;909&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom style="background-color: #E6E9FF; border-bottom: 1 solid #000000; padding-left: 0"><P style="font-family: Arial; margin: 0pt">&nbsp;&nbsp;Accounts payable and accrued liabilities</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; border-bottom: 1 solid #000000; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(2,359)</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; border-bottom: 1 solid #000000; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(2,109)</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; border-bottom: 1 solid #000000; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(5,812)</P>
</TD><TD valign=bottom style="background-color: #E6E9FF; border-bottom: 1 solid #000000; padding-left: 0"><P style="font-family: Arial; margin: 0pt; padding-left: 36pt" align=right>&nbsp;(1,476)</P>
</TD></TR>
<TR><TD style="border-bottom-style: double; border-bottom-color: #000000; padding-left: 0" valign=bottom><P style="font-family: Arial; margin: 0pt">&nbsp;&nbsp;</P>
</TD><TD style="border-bottom-style: double; border-bottom-color: #000000; padding-left: 0" valign=bottom><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$(6,576)</P>
</TD><TD style="border-bottom-style: double; border-bottom-color: #000000; padding-left: 0" valign=bottom><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$(804)</P>
</TD><TD style="border-bottom-style: double; border-bottom-color: #000000; padding-left: 0" valign=bottom><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$(11,772)</P>
</TD><TD style="border-bottom-style: double; border-bottom-color: #000000; padding-left: 0" valign=bottom><P style="margin:0pt; padding-left:36pt; font-family:Arial" align=right>&nbsp;$(3,069)</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin-top:0pt; margin-bottom:-12pt; font-family:Arial"><B>10.</B></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial"><B>SEGMENTED INFORMATION (Restated)</B></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; padding-left:36pt; font-family:Arial" align=justify>Substantially all of the Company&#146;s operations are within the mining sector, conducted through operations in six countries. &nbsp;Due to differences between mining and exploration activities, the Company has a separate budgeting process and measures the results of operations and exploration activities independently. &nbsp;The Corporate office provides financial, human resources and technical support to its mining and exploration activities.</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; font-family:Arial">Segmented disclosures and enterprise-wide information are as follows:</P>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=162></TD><TD width=70.55></TD><TD width=72></TD><TD width=72></TD><TD width=60.75></TD></TR>
<TR><TD valign=top width=216>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=367.067 colspan=4><P style="margin:0pt; font-family:Arial" align=center>For the three months ended September 30, 2004</P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=216><P style="margin:0pt"><BR></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=94.067><P style="margin:0pt"><BR></P>
<P style="margin:0pt; font-family:Arial" align=center>Mining</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Arial" align=center>Corporate</P>
<P style="margin:0pt; font-family:Arial" align=center>Office</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Arial" align=center>Exploration &amp; Development</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=81><P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt; font-family:Arial" align=center>Total</P>
</TD></TR>
<TR><TD width=216 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Revenue from external customers</P>
</TD><TD width=94.067 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:30.1pt; font-family:Arial">28,055</P>
</TD><TD width=96 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:35.9pt; font-family:Arial">(139)</P>
</TD><TD width=96 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:54.25pt; font-family:Arial">-</P>
</TD><TD width=81 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:0.05pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:22.45pt; font-family:Arial">27,916</P>
</TD></TR>
<TR><TD valign=top width=216><P style="line-height:15pt; margin:0pt; font-family:Arial">Net income (loss) for the period</P>
</TD><TD valign=top width=94.067><P style="line-height:15pt; margin:0pt; text-indent:35.1pt; font-family:Arial">5,004</P>
</TD><TD valign=top width=96><P style="line-height:15pt; margin:0pt; text-indent:28.4pt; font-family:Arial">(4,040)</P>
</TD><TD valign=top width=96><P style="line-height:15pt; margin:0pt; text-indent:35.9pt; font-family:Arial">(606)</P>
</TD><TD valign=top width=81><P style="line-height:15pt; margin:0pt; text-indent:35.05pt; font-family:Arial">358</P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=162></TD><TD width=72></TD><TD width=70.85></TD><TD width=69.75></TD><TD width=63></TD></TR>
<TR><TD valign=top width=216>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=367.467 colspan=4><P style="margin:0pt; font-family:Arial" align=center>For the three months ended September 30, 2003</P>
<P style="margin:0pt; font-family:Arial" align=center><SUP>(Note 2)</SUP></P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=216><P style="margin:0pt"><BR></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=96><P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt; font-family:Arial" align=center>Mining</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=94.467><P style="margin:0pt; font-family:Arial" align=center>Corporate</P>
<P style="margin:0pt; font-family:Arial" align=center>Office</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=93><P style="margin:0pt; font-family:Arial" align=center>Exploration &amp; Development</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=84><P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt; font-family:Arial" align=center>Total</P>
</TD></TR>
<TR><TD width=216 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Revenue from external customers</P>
</TD><TD width=96 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:30.1pt; font-family:Arial">11,838</P>
</TD><TD width=94.467 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:47.6pt; font-family:Arial">52</P>
</TD><TD width=93 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:54.25pt; font-family:Arial">-</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:1.15pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:25.6pt; font-family:Arial">11,890</P>
</TD></TR>
<TR><TD valign=top width=216><P style="line-height:15pt; margin:0pt; font-family:Arial">Net income (loss) for the period</P>
</TD><TD valign=top width=96><P style="line-height:15pt; margin:0pt; text-indent:42.6pt; font-family:Arial">655</P>
</TD><TD valign=top width=94.467><P style="line-height:15pt; margin:0pt; text-indent:28.4pt; font-family:Arial">(1,641)</P>
</TD><TD valign=top width=93><P style="line-height:15pt; margin:0pt; text-indent:35.9pt; font-family:Arial">(239)</P>
</TD><TD valign=top width=84><P style="line-height:15pt; margin:0pt; text-indent:23.9pt; font-family:Arial">(1,225)</P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><FONT FACE="Times New Roman">15</FONT></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt; page-break-before:always"><FONT FACE="Arial">Pan American Silver Corp.</FONT></P>
<P style="margin:0pt; font-family:Arial">Notes to consolidated financial statements</P>
<P style="margin:0pt; font-family:Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended</P>
<P style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts)</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Arial; border-bottom:0.5pt solid #000000">(Unaudited) </P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=162.15></TD><TD width=72></TD><TD width=72></TD><TD width=71.1></TD><TD width=64.45></TD></TR>
<TR><TD valign=top width=216.2>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=372.733 colspan=4><P style="margin:0pt; font-family:Arial" align=center>For the nine months ended September 30, 2004</P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=216.2><P style="margin:0pt"><BR></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt"><BR></P>
<P style="margin:0pt; font-family:Arial" align=center>Mining</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Arial" align=center>Corporate</P>
<P style="margin:0pt; font-family:Arial" align=center>Office</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=94.8><P style="margin:0pt; font-family:Arial" align=center>Exploration &amp; Development</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=85.933><P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt; font-family:Arial" align=center>Total</P>
</TD></TR>
<TR><TD width=216.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial">Revenue from external customers</P>
</TD><TD width=96 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:30.1pt; font-family:Arial">66,207</P>
</TD><TD width=96 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:28.4pt; font-family:Arial">(1,404)</P>
</TD><TD width=94.8 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:54.25pt; font-family:Arial">-</P>
</TD><TD width=85.933 style="background-color: #E6E9FF"><P style="margin-top:0pt; margin-bottom:-12pt; text-indent:-0.65pt; font-family:Arial">$</P>
<P style="margin:0pt; text-indent:25.6pt; font-family:Arial">64,803</P>
</TD></TR>
<TR><TD valign=top width=216.2><P style="line-height:15pt; margin:0pt; font-family:Arial">Net income (loss) for the period</P>
</TD><TD valign=top width=96><P style="line-height:15pt; margin:0pt; text-indent:30.1pt; font-family:Arial">12,022</P>
</TD><TD valign=top width=96><P style="line-height:15pt; margin:0pt; text-indent:28.4pt; font-family:Arial">(8,281)</P>
</TD><TD valign=top width=94.8><P style="line-height:15pt; margin:0pt; text-indent:28.4pt; font-family:Arial">(2,054)</P>
</TD><TD valign=top width=85.933><P style="line-height:15pt; margin:0pt; text-indent:31.15pt; font-family:Arial">1,687</P>
</TD></TR>
<TR><TD valign=top width=216.2 style="background-color: #E6E9FF"><P style="line-height:15pt; margin:0pt; font-family:Arial">Segmented assets</P>
</TD><TD valign=top width=96 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:24.25pt; font-family:Arial">178,991</P>
</TD><TD valign=top width=96 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:31.9pt; font-family:Arial">72,493</P>
</TD><TD valign=top width=94.8 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:30.1pt; font-family:Arial">90,575</P>
</TD><TD valign=top width=85.933><P style="line-height: 17pt; text-indent: -0.65pt; font-family: Arial; background-color: #E6E9FF; margin-top: 0pt; margin-bottom: -17pt">$</P>
<P style="line-height: 15pt; text-indent: 21.15pt; font-family: Arial; background-color: #E6E9FF; margin: 0pt">342,059</P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=168.65></TD><TD width=72></TD><TD width=71.1></TD><TD width=69.75></TD><TD width=71></TD></TR>
<TR><TD valign=top width=224.867>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=378.467 colspan=4><P style="margin:0pt; font-family:Arial" align=center>For the nine months ended September 30, 2003</P>
<P style="margin:0pt; font-family:Arial" align=center><SUP>(Note 2)</SUP></P>
</TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=top width=224.867><P style="margin:0pt"><BR></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=96><P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt; font-family:Arial" align=center>Mining</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=94.8><P style="margin:0pt; font-family:Arial" align=center>Corporate</P>
<P style="margin:0pt; font-family:Arial" align=center>Office</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=93><P style="margin:0pt; font-family:Arial" align=center>Exploration &amp; Development</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=94.667><P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt; font-family:Arial" align=center>Total</P>
</TD></TR>
<TR><TD valign=top width=224.867 style="background-color: #E6E9FF"><P style="line-height:15pt; margin:0pt; font-family:Arial">Revenue from external customers</P>
</TD><TD valign=top width=96 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:30.1pt; font-family:Arial">31,905</P>
</TD><TD valign=top width=94.8 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:42.6pt; font-family:Arial">360</P>
</TD><TD valign=top width=93 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:54.25pt; font-family:Arial">-</P>
</TD><TD valign=top width=94.667 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:31.9pt; font-family:Arial">32,265</P>
</TD></TR>
<TR><TD valign=top width=224.867><P style="line-height:15pt; margin:0pt; font-family:Arial">Net income (loss) for the period</P>
</TD><TD valign=top width=96><P style="line-height:15pt; margin:0pt; text-indent:42.6pt; font-family:Arial">333</P>
</TD><TD valign=top width=94.8><P style="line-height:15pt; margin:0pt; text-indent:28.4pt; font-family:Arial">(3,457)</P>
</TD><TD valign=top width=93><P style="line-height:15pt; margin:0pt; text-indent:35.9pt; font-family:Arial">(848)</P>
</TD><TD valign=top width=94.667><P style="line-height:15pt; margin:0pt; text-indent:30.2pt; font-family:Arial">(3,972)</P>
</TD></TR>
<TR><TD valign=top width=224.867 style="background-color: #E6E9FF"><P style="line-height:15pt; margin:0pt; font-family:Arial">Segmented assets</P>
</TD><TD valign=top width=96 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:29.25pt; font-family:Arial">92,611</P>
</TD><TD valign=top width=94.8 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:29.25pt; font-family:Arial">91,696</P>
</TD><TD valign=top width=93 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:30.1pt; font-family:Arial">86,403</P>
</TD><TD valign=top width=94.667 style="background-color: #E6E9FF"><P style="line-height:17pt; margin-top:0pt; margin-bottom:-17pt; text-indent:7.6pt; font-family:Arial">$</P>
<P style="line-height:15pt; margin:0pt; text-indent:27.7pt; font-family:Arial">270,710</P>
</TD></TR>
</TABLE>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><FONT FACE="Times New Roman">16</FONT></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; page-break-before:always"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="line-height:18pt; margin-top:16pt; margin-bottom:4pt; font-family:Arial; font-size:16pt" align=justify><FONT FACE="Arial"><B>Third Quarter 2004 Management&#146;s Discussion and Analysis</B></FONT></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Management's Discussion and Analysis (&#147;MD&amp;A&#148;) presented below reflects the effects of the restatement on the consolidated financial statements as at September 30, 2004 and for the three and nine month periods ended September 30, 2004. &nbsp;See &quot;Restatement&quot; below for further discussion of this matter. &nbsp;Apart from revisions described under &#147;Restatement&#148; below, this MD&amp;A has not been revised for new events or developments.</P>
<P style="margin:0pt"><BR></P>
<P style="line-height:13pt; margin-top:0pt; margin-bottom:5.5pt; font-family:Arial; font-size:11pt" align=justify>The MD&amp;A focuses on significant factors that affected Pan American Silver Corp.&#146;s and its subsidiaries&#146; (&#147;Pan American&#148; or the &#147;Company&#148;) performance and such factors that may affect its future performance. &nbsp;The MD&amp;A should be read in conjunction with the unaudited consolidated financial statements for the three months and nine months ended September 30, 2004 and the related notes contained herein.</P>
<P style="margin-top:0pt; margin-bottom:5.5pt" align=justify><BR></P>
<P style="line-height:13pt; margin-top:0pt; margin-bottom:5.5pt; font-family:Arial; font-size:11pt" align=justify>The significant accounting policies are outlined within Note 2 to the Consolidated Financial Statements of the Company for the year ended December 31, 2003. These accounting policies have been applied consistently for the nine months ended September 30, 2004.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify><B>Restatement</B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:normal; margin:0pt; font-family:Arial; font-size:11pt" align=justify>In 2004, Pan American implemented a hedge accounting policy for the accounting treatment of its base-metal forward contracts program. &nbsp;In the fourth quarter of 2005 it was concluded that the Company&#146;s accounting for its forward contracts for the sale of base metals (lead and zinc) ,its forward contracts for purchasing Mexican pesos with US dollars and its silver fixing contracts do not qualify for hedge accounting under AcG-13, Hedging Relationships. &nbsp;As a result, Pan American has restated its unaudited consolidated financial statements for each quarter from March 31, 2004 to September 30, 2005.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Pan American is now required to recognize mark-to market valuations of its open forward contract positions through its income at the end of each period. &nbsp;In the past, Pan American had recognized gains, losses, revenues and expenses from its forward contracts in its income only in the period in which they settled. &nbsp;The effects of the change in accounting treatment are summarized in the following tables:</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=171.45></TD><TD width=11.25></TD><TD width=115.7></TD><TD width=7.85></TD><TD width=100.15></TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=169.267 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>&nbsp;As Previously Reported</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>&nbsp;As Restated</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=169.267 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify><B>Consolidated Balance Sheets</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=169.267 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=169.267 colspan=2>&nbsp;</TD><TD valign=top width=144 colspan=2>&nbsp;</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Deferred loss on commodity contracts</P>
</TD><TD valign=top width=15 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=top width=154.267><P style="line-height:11pt; margin:0pt; text-indent:61.1pt; font-family:Arial; font-size:9pt">-</P>
</TD><TD valign=top width=10.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD valign=top width=133.533 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:53.05pt; font-family:Arial; font-size:9pt">111</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Unrealized loss on commodity contracts</P>
</TD><TD valign=top width=15>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=154.267><P style="line-height:11pt; margin:0pt; text-indent:61.1pt; font-family:Arial; font-size:9pt">-</P>
</TD><TD valign=top width=10.467>&nbsp;</TD><TD valign=top width=133.533><P style="line-height:11pt; margin:0pt; text-indent:46.3pt; font-family:Arial; font-size:9pt">2,634</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Deficit</P>
</TD><TD valign=top width=15 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=top width=154.267><P style="line-height:11pt; margin:0pt; text-indent:28.85pt; font-family:Arial; font-size:9pt" align=justify>(127,646)</P>
</TD><TD valign=top width=10.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=133.533 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:31.3pt; font-family:Arial; font-size:9pt" align=justify>(130,169)</P>
</TD></TR>
</TABLE>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><FONT FACE="Times New Roman">17</FONT></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; page-break-before:always"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=169.4></TD><TD width=11.15></TD><TD width=117.85></TD><TD width=7.85></TD><TD width=100.15></TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><FONT FACE="Arial"><B>As Previously Reported</B></FONT></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>As Restated</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Three Month Ended</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Three Month Ended</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify><B>Consolidated Statement of Operations</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=14.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=157.133><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=10.467>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=133.533><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD valign=top width=14.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=157.133>&nbsp;</TD><TD valign=top width=10.467>&nbsp;</TD><TD valign=top width=133.533>&nbsp;</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Revenue</P>
</TD><TD valign=bottom width=14.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=157.133><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">27,409</P>
</TD><TD valign=bottom width=10.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD valign=bottom width=133.533 style="background-color: #E6E9FF"><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">27,916</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Mine operating earnings</P>
</TD><TD width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="border-right:0.5pt solid #000000" width=157.133><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">5,850</P>
</TD><TD width=10.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=133.533><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">6,357</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Loss on commodity contracts</P>
</TD><TD valign=bottom width=14.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=157.133><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align=right>-</P>
</TD><TD valign=bottom width=10.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=bottom width=133.533 style="background-color: #E6E9FF"><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align=right>(3,438)</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Income for the period</P>
</TD><TD valign=top width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=157.133><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align=right>3,289</P>
</TD><TD valign=top width=10.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=133.533><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align=right>358</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; padding-left:3.8pt; text-indent:-3.8pt; font-family:Arial; font-size:9pt">Adjusted net income for the period attributable to common shareholders</P>
</TD><TD width=14.867 valign="bottom" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" width=157.133 valign="bottom"><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">3,289</P>
</TD><TD width=10.467 valign="bottom" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=133.533 valign="bottom" style="background-color: #E6E9FF"><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">358</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Basic and diluted earnings per share</P>
</TD><TD valign=top width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=157.133><P style="line-height: 11pt; font-family: Arial; font-size: 9pt; text-indent: 46.7pt; margin: 0pt; padding-right: 18pt" align=right>0.05</P>
</TD><TD valign=top width=10.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=133.533><P style="line-height: 11pt; font-family: Arial; font-size: 9pt; text-indent: 46.7pt; margin: 0pt; padding-right: 18pt" align=right>0.01</P>
</TD></TR>
</TABLE>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD width=169.4></TD><TD width=11.15></TD><TD width=117.85></TD><TD width=7.85></TD><TD width=100.15></TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>As Previously Reported</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>As Restated</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Nine Month Ended</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Nine Month Ended</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30</B></P>
</TD><TD valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify><B>Consolidated Statement of Operations</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=172 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=144 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=172 colspan=2>&nbsp;</TD><TD valign=top width=144 colspan=2>&nbsp;</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Revenue</P>
</TD><TD valign=bottom width=14.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=157.133><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">63,510</P>
</TD><TD valign=bottom width=10.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD valign=bottom width=133.533 style="background-color: #E6E9FF"><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">64,803</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Mine operating earnings</P>
</TD><TD width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="border-right:0.5pt solid #000000" width=157.133><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">10,099</P>
</TD><TD width=10.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=133.533><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">11,392</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Loss on commodity contracts</P>
</TD><TD valign=bottom width=14.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=157.133><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align=right>-</P>
</TD><TD valign=bottom width=10.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=bottom width=133.533 style="background-color: #E6E9FF"><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align=right>(3,816)</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Net income for the period</P>
</TD><TD valign=top width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=157.133><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align=right>4,210</P>
</TD><TD valign=top width=10.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=133.533><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align=right>1,687</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Adjusted net loss for the period attributable to common shareholders</P>
</TD><TD width=14.867 valign="bottom" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" width=157.133 valign="bottom"><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">(7,092)</P>
</TD><TD width=10.467 valign="bottom" style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=133.533 valign="bottom" style="background-color: #E6E9FF"><P style="line-height: 11pt; text-indent: 46.7pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 18pt" align="right">(9,615)</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Basic and diluted loss per share</P>
</TD><TD valign=top width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=157.133><P style="line-height: 11pt; font-family: Arial; font-size: 9pt; text-indent: 46.7pt; margin: 0pt; padding-right: 18pt" align=right>(0.11)</P>
</TD><TD valign=top width=10.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=133.533><P style="line-height: 11pt; font-family: Arial; font-size: 9pt; text-indent: 46.7pt; margin: 0pt; padding-right: 18pt" align=right>(0.16)</P>
</TD></TR>
</TABLE>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>This change in accounting treatment has no impact on our cash flows. &nbsp;The details of our commodity and foreign currency forward contracts, which we have previously disclosed, have not changed and Management believes that they continue to serve Pan American as a prudent risk management tool. &nbsp;Pan American does not hedge future silver production.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt" align=justify><B>Significant Events and Transactions of the Third Quarter</B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>The Company completed its acquisition of 92 per cent of the voting shares of Compa&#241;&#237;a Minera Argentum (&#147;Argentum&#148;), a public company listed on the Peru Stock Exchange, which holds the Morococha mining assets previously owned by Sociedad Minera Corona. &nbsp;The Argentum shares were purchased for $33.78 million by way of a public offering through the Lima Stock Exchange. &nbsp;This gave Pan American an 81per cent direct interest in Argentum. &nbsp;Subsequent to this offer, the Company purchased an additional 3 per cent interest in Argentum by acquiring 25 per cent of the investment shares for $0.84 million. &nbsp;In addition, Pan American acquired 100 per cent of Compa&#241;&#237;a Minera Natividad (&#147;Natividad&#148;) for $1.5 million, which holds numerous adjacent mineral concessions and the Amistad processing facility. &nbsp;The Company intends to combine Natividad and Argentum in the near future
. &nbsp;The statements of operations and balance sheets of Argentum and Natividad have been incorporated into Pan American&#146;s consolidated financial statements from July 1, 2004.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Argentum and Natividad (collectively &#147;Morococha&#148;) contributed 694,564 ounces of silver to Pan American&#146;s production in the third quarter of 2004 at a cash cost of $3.52 per ounce. &nbsp;Over the longer term Morococha is expected to produce 3.5 million ounces of silver annually at a cash cost of less than $3.00 per ounce.</P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><FONT FACE="Times New Roman">18</FONT></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; page-break-before:always"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>The fair value of assets and liabilities acquired through the acquisition of Morococha are summarized as follows:</P>
<div align="center">
  <center>

<TABLE border=0 width=75% cellspacing=0 cellpadding=0>
<TR valign="bottom">
	<TD width=71% nowrap align=left>
&nbsp;
	</TD>
	<TD width=12% nowrap align=left>
&nbsp;
	</TD>
	<TD width=15% nowrap align=right>
<FONT size=2 face="sans-serif">(US&#36;&#146;000)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">Cash</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">&#36;</FONT>&nbsp;
	</TD>
	<TD width=15% nowrap align=right style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">657</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left>
<FONT size=2 face="sans-serif">Accounts receivable</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=left>
&nbsp;
	</TD>
	<TD width=15% nowrap align=right>
<FONT size=2 face="sans-serif">4,365</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">Inventory</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=left style="background-color: #E6E9FF">
&nbsp;
	</TD>
	<TD width=15% nowrap align=right style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">2,878</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left>
<FONT size=2 face="sans-serif">Prepaid expenses</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=left>
&nbsp;
	</TD>
	<TD width=15% nowrap align=right>
<FONT size=2 face="sans-serif">46</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">Plant and equipment</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=left style="background-color: #E6E9FF">
&nbsp;
	</TD>
	<TD width=15% nowrap align=right style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">7,053</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left>
<FONT size=2 face="sans-serif">Mineral properties</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=left>
&nbsp;
	</TD>
	<TD width=15% nowrap align=right>
<FONT size=2 face="sans-serif">46,158</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">Less:</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=left style="background-color: #E6E9FF">
&nbsp;
	</TD>
	<TD width=15% nowrap align=right style="background-color: #E6E9FF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left>
 &nbsp; &nbsp;<FONT size=2 face="sans-serif">Accounts payable and accrued liabilities</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=left>
&nbsp;
	</TD>
	<TD width=15% nowrap align=right>
<FONT size=2 face="sans-serif">(3,215)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left style="background-color: #E6E9FF">
 &nbsp; &nbsp;<FONT size=2 face="sans-serif">Minority interest</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=left style="background-color: #E6E9FF">
&nbsp;
	</TD>
	<TD width=15% nowrap align=right style="background-color: #E6E9FF">
<FONT size=2 face="sans-serif">(1,414)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=83% nowrap colspan=2 align=left>
 &nbsp; &nbsp;<FONT size=2 face="sans-serif">Provision for asset retirement obligation and reclamation</FONT>&nbsp;
	</TD>
	<TD width=15% nowrap align=right>
<FONT size=2 face="sans-serif">(8,618)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left style="background-color: #E6E9FF; border-bottom: 1 solid #000000">
 &nbsp; &nbsp;<FONT size=2 face="sans-serif">Future income tax liability</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=left style="background-color: #E6E9FF; border-bottom: 1 solid #000000">
&nbsp;
	</TD>
	<TD width=15% nowrap align=right style="background-color: #E6E9FF; border-bottom: 1 solid #000000">
<FONT size=2 face="sans-serif">(11,038)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=71% nowrap align=left style="border-bottom-style: double; border-bottom-color: #000000">
<FONT size=2 face="sans-serif">Total purchase price</FONT>&nbsp;
	</TD>
	<TD width=12% nowrap align=right style="border-bottom-style: double; border-bottom-color: #000000">
<FONT size=2 face="sans-serif">&#36;</FONT>&nbsp;
	</TD>
	<TD width=15% nowrap align=right style="border-bottom-style: double; border-bottom-color: #000000">
<FONT size=2 face="sans-serif">36,871</FONT>&nbsp;
	</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0pt"><BR></P>
<P style="line-height:13pt; margin-top:0pt; margin-bottom:5.5pt; font-family:Arial; font-size:11pt" align=justify>The future income tax liability arises due to the fact that the purchase consideration exceeded the carrying value of the mining assets for tax purposes, resulting in a temporary difference between the accounting and tax value. &nbsp;The estimated future income tax liability associated with this temporary difference is $11.04 million and has been recognized as a future income tax liability and also applied to increase the carrying value of the mineral properties.</P>
<P style="margin-top:0pt; margin-bottom:5.5pt" align=justify><BR></P>
<P style="line-height:13pt; margin-top:0pt; margin-bottom:5.5pt; font-family:Arial; font-size:11pt" align=justify>The provision for asset retirement obligation and reclamation of $8.62 million arises pursuant to CICA Handbook Section 3110 &#150; &#147;Accounting for Asset Retirement Obligations&#148;, which required the Company to recognize the expected fair value of future site restoration costs at Morococha as a liability and to increase the carrying value of mineral properties by the same amount. &nbsp;The liability is accreted over time to its anticipated future value with a corresponding charge to the statement of operations while the increase in the carrying value of mineral properties is amortized on a unit of production basis.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>The La Colorada mine in Mexico reached commercial production on January 1, 2004 after a $20 million expansion, which began in late 2002. &nbsp;As such, all revenue and expense items were recognized in the statement of operations in the first nine months of 2004, having been capitalized throughout 2003. This change in accounting treatment gives rise to several significant differences when comparing the consolidated statement of operations for the third quarter of 2004 with the corresponding period in 2003. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt" align=justify><B>Results of Operations</B> </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>For the three months ended September 30, 2004 the Company&#146;s net income was $0.4 million (earnings per share of $0.01) compared to a net loss of ($1.23 million) (($0.10) per share) for the corresponding period in 2003. &nbsp;The Company generated net income of $1.69 million for the nine-month period ended September 30, 2004 compared to a loss of $3.97 million for the corresponding period in 2003. &nbsp;The loss per share of ($0.16) for the nine months ended September 30, 2004 includes charges associated with the conversion and accretion of the Company&#146;s 5.25 per cent convertible unsecured senior subordinated debentures (the &#147;Debentures&#148;), which occurred in the second quarter of 2004 and were charged directly to the deficit. </P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>&nbsp;</P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><FONT FACE="Times New Roman">19</FONT></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="margin:0pt; page-break-before:always"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Revenue from metal sales was 135 per cent higher in the third quarter of 2004 and 101 per cent higher in the first nine months of 2004 compared to the corresponding periods in 2003. &nbsp;The acquisition of the Morococha mine and the La Colorada mine reaching commercial production on January 1, 2004, accounted for 94 per cent of the revenue increase from a year ago. &nbsp;The Company&#146;s other mining operations were responsible for the remaining 41 per cent increase in revenue due to higher realized metal prices in spite of the fact that less tonnes of concentrate were sold in the third quarter of 2004 than the same period in 2003.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>The Company continued the trend of improving operating profits in the third quarter of 2004. &nbsp;Operating profit is the difference between revenue and cash operating costs. &nbsp;In the third quarter of 2004 operating profits were $9.4 million, up from $4.6 million in the second quarter of 2004 and from $1.7 million in the comparable quarter of 2003. &nbsp;As reflected in the following table, the third quarter of 2004 represents the eighth consecutive quarter that the Company has improved its operating profit. &nbsp;Steadily improving operating profit has helped the Company record its second consecutive quarter of positive net earnings. &nbsp;Partially offsetting the improved operating profits were increases in depreciation and amortization, exploration and general and administrative charges, reflecting the increased activity levels of a growing enterprise. &nbsp;The table below sets out select quarterly results for t
he past eleven quarters, which are stated in thousands of US dollars, except per share amounts. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=45></TD><TD width=63></TD><TD width=18></TD><TD width=63></TD><TD width=18></TD><TD width=63></TD><TD width=27></TD><TD width=63></TD><TD width=18></TD><TD width=43.8></TD><TD width=20.75></TD></TR>
<TR><TD style="border:0.5pt solid #000000" width=60><P style="line-height:11pt; margin:0pt; text-indent:12.15pt; font-family:Arial; font-size:9pt"><B>Year &nbsp;&nbsp;</B></P>
</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=84><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Quarter</B></P>
<P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><I>(unaudited)</I></P>
</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=108 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Revenue</B></P>
</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=108 colspan=2><P style="line-height:normal; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Operating Profit </B>(1)</P>
</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=120 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Net income/(loss) for the period</B></P>
</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=82.4 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Net loss per share</B></P>
</TD><TD valign=top width=27.667>&nbsp;</TD></TR>
<TR><TD width=60 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>2004</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Sept. 30</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:11.65pt; font-family:Arial; font-size:9pt">27,916</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:16.15pt; font-family:Arial; font-size:9pt">9,390</P>
</TD><TD width=36 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:22.9pt; font-family:Arial; font-size:9pt">358</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:22.5pt; font-family:Arial; font-size:9pt">0.01</P>
</TD><TD valign=top width=27.667 style="background-color: #E6E9FF">&nbsp;</TD></TR>
<TR><TD width=60>&nbsp;</TD><TD width=84><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">June 30</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:11.65pt; font-family:Arial; font-size:9pt">21,179</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:16.15pt; font-family:Arial; font-size:9pt">4,648</P>
</TD><TD width=36><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:16.15pt; font-family:Arial; font-size:9pt">3,352</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4><P style="line-height:11pt; margin:0pt; text-indent:19.5pt; font-family:Arial; font-size:9pt">(0.09)</P>
</TD><TD valign=top width=27.667><P style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">(2)</P>
</TD></TR>
<TR><TD width=60 style="background-color: #E6E9FF">&nbsp;</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">March 31</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:11.65pt; font-family:Arial; font-size:9pt">15,708</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:16.15pt; font-family:Arial; font-size:9pt">4,540</P>
</TD><TD width=36 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:10.15pt; font-family:Arial; font-size:9pt">(2,023)</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:19.5pt; font-family:Arial; font-size:9pt">(0.08)</P>
</TD><TD valign=top width=27.667 style="background-color: #E6E9FF"><P style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">(2)</P>
</TD></TR>
<TR><TD width=60><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>2003</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Dec. 31</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:11.65pt; font-family:Arial; font-size:9pt">12,857</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:16.15pt; font-family:Arial; font-size:9pt">2,041</P>
</TD><TD width=36><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:10.15pt; font-family:Arial; font-size:9pt">(2,840)</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4><P style="line-height:11pt; margin:0pt; text-indent:19.5pt; font-family:Arial; font-size:9pt">(0.05)</P>
</TD><TD valign=top width=27.667>&nbsp;</TD></TR>
<TR><TD width=60 style="background-color: #E6E9FF">&nbsp;</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Sept. 30</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:11.65pt; font-family:Arial; font-size:9pt">11,890</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:16.15pt; font-family:Arial; font-size:9pt">1,690</P>
</TD><TD width=36 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:10.15pt; font-family:Arial; font-size:9pt">(1,125)</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:19.5pt; font-family:Arial; font-size:9pt">(0.10)</P>
</TD><TD valign=top width=27.667 style="background-color: #E6E9FF">&nbsp;</TD></TR>
<TR><TD width=60>&nbsp;</TD><TD width=84><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">June 30</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:11.65pt; font-family:Arial; font-size:9pt">12,553</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:16.15pt; font-family:Arial; font-size:9pt">1,220</P>
</TD><TD width=36><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:10.15pt; font-family:Arial; font-size:9pt">(1,156)</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4><P style="line-height:11pt; margin:0pt; text-indent:19.5pt; font-family:Arial; font-size:9pt">(0.02)</P>
</TD><TD valign=top width=27.667>&nbsp;</TD></TR>
<TR><TD width=60 style="background-color: #E6E9FF">&nbsp;</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">March 31</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:16.15pt; font-family:Arial; font-size:9pt">7,822</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:22.9pt; font-family:Arial; font-size:9pt">393</P>
</TD><TD width=36 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:10.15pt; font-family:Arial; font-size:9pt">(1,573)</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:19.5pt; font-family:Arial; font-size:9pt">(0.03)</P>
</TD><TD valign=top width=27.667 style="background-color: #E6E9FF">&nbsp;</TD></TR>
<TR><TD width=60><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center>2002</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Dec. 31</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:11.65pt; font-family:Arial; font-size:9pt">12,084</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:22.9pt; font-family:Arial; font-size:9pt">379</P>
</TD><TD width=36><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:5.65pt; font-family:Arial; font-size:9pt">(14,040)</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4><P style="line-height:11pt; margin:0pt; text-indent:19.5pt; font-family:Arial; font-size:9pt">(0.35)</P>
</TD><TD valign=top width=27.667>&nbsp;</TD></TR>
<TR><TD width=60 style="background-color: #E6E9FF">&nbsp;</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Sept. 30</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:11.65pt; font-family:Arial; font-size:9pt">11,195</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:16.9pt; font-family:Arial; font-size:9pt">(252)</P>
</TD><TD width=36 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:5.65pt; font-family:Arial; font-size:9pt">(17,387)</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:19.5pt; font-family:Arial; font-size:9pt">(0.40)</P>
</TD><TD valign=top width=27.667 style="background-color: #E6E9FF">&nbsp;</TD></TR>
<TR><TD width=60>&nbsp;</TD><TD width=84><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">June 30</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:11.65pt; font-family:Arial; font-size:9pt">11,615</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:22.9pt; font-family:Arial; font-size:9pt">808</P>
</TD><TD width=36><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84><P style="line-height:11pt; margin:0pt; text-indent:10.15pt; font-family:Arial; font-size:9pt">(1,247)</P>
</TD><TD width=24><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4><P style="line-height:11pt; margin:0pt; text-indent:19.5pt; font-family:Arial; font-size:9pt">(0.03)</P>
</TD><TD valign=top width=27.667>&nbsp;</TD></TR>
<TR><TD width=60 style="background-color: #E6E9FF">&nbsp;</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">March 31</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:11.65pt; font-family:Arial; font-size:9pt">10,199</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:22.9pt; font-family:Arial; font-size:9pt">997</P>
</TD><TD width=36 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=84 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:10.15pt; font-family:Arial; font-size:9pt">(1,303)</P>
</TD><TD width=24 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>$</P>
</TD><TD width=58.4 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:19.5pt; font-family:Arial; font-size:9pt">(0.03)</P>
</TD><TD valign=top width=27.667 style="background-color: #E6E9FF">&nbsp;</TD></TR>
<TR><TD width=60>&nbsp;</TD><TD width=84>&nbsp;</TD><TD width=24>&nbsp;</TD><TD width=84>&nbsp;</TD><TD width=24>&nbsp;</TD><TD width=84>&nbsp;</TD><TD width=36>&nbsp;</TD><TD width=84><P style="margin:0pt"><BR></P>
</TD><TD width=24>&nbsp;</TD><TD width=58.4>&nbsp;</TD><TD valign=top width=27.667>&nbsp;</TD></TR>
<TR><TD width=60><P style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align=right>(1)</P>
</TD><TD width=530.067 colspan=10><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Operating Profit/(Loss) is equal to total revenues less direct mine operating expenses</P>
</TD></TR>
<TR><TD width=60><P style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align=right>(2)</P>
</TD><TD width=530.067 colspan=10><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Includes charges associated with the early conversion and accretion of the Debentures</P>
</TD></TR>
</TABLE>
  </center>
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<P style="margin:0pt"><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Depreciation and amortization charges for the third quarter increased significantly to $3.03 million from $0.43 million a year before. &nbsp;The purchase of Morococha and the achievement of commercial production at La Colorada are the principal reasons for this increase. &nbsp;Depreciation and amortization have also increased as a direct result of the Company&#146;s adoption of CICA Handbook Section 3110 &#150; &#147;Accounting for Asset Retirement Obligations&#148;, which required the Company to increase its asset carrying values by $7.9 million as at December 31, 2003. &nbsp;The amortization of these higher asset values on a unit of production basis has resulted in increased depreciation charges. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>General and administration (&#147;G &amp; A&#148;) costs for the three-month period ended September 30, 2004 were $0.93 million, up from $0.57 million for the comparable quarter in 2003. &nbsp;G &amp; A costs have increased significantly in 2004 from previous years, which is a reflection of the expansion of the Company&#146;s management team, necessary to execute the Company&#146;s growth plans and to a lesser extent a stronger Canadian dollar. &nbsp;</P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>&nbsp;</P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><font face="Times New Roman">20</font></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
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<P style="margin:0pt"><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>The Company recognized a $0.52 million stock-based compensation expense in the third quarter of 2004, as a result of adopting CICA Handbook Section 3870 &#150; &#147;Stock-Based Compensation&#148; in the fourth quarter of 2003. On a restated basis, the comparable expense recorded in the quarter ended September 30, 2003 was $0.84 million. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Reclamation expense of $0.30 million in the third quarter of 2004 related to the accretion of the liability that the Company recognized by adopting CICA Handbook Section 3110 &#150; &#147;Accounting for Asset Retirement Obligations&#148; as at December 31, 2003. &nbsp;&nbsp;&nbsp;Aside from those restoration costs associated with the Morococha mine, there has been no change to the Company&#146;s expectations of future site restoration costs during the quarter at any of its other mines.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Higher exploration and development expenses were recorded for the three-month and nine-month periods of 2004 relative to 2003 primarily as a result of the Company&#146;s active development program at Manantial Espejo.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Interest and other income represented net income received from the San Vicente operation and interest received from the cash balances the Company maintained during the quarter, which were substantially higher than a year ago primarily due to the proceeds of the Debentures, together with the equity financing completed in March 2004.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt" align=justify><B>Production </B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Pan American produced 3,173,000 ounces of silver in the third quarter of 2004, a 45 per cent increase from the corresponding period in 2003. &nbsp;The acquisition of the Morococha mine accounts for 32 per cent of the increase, with significant increases at La Colorada and the San Vicente operation responsible for the balance. &nbsp;The Quiruvilca mine maintained its strong performance by producing more ounces than a year ago at much lower cash costs per ounce. &nbsp;The Huaron mine continued to improve on a challenging first quarter by recording higher silver production than in the third quarter of 2003 at a cash cost of $3.87 per ounce. &nbsp;The Company&#146;s Pyrite Stockpile operation was again profitable, producing 231,115 ounces of silver during the quarter at cash costs of $2.87 per ounce. &nbsp;</P>
<P style="margin:0pt"><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>While production rates at the La Colorada mine are steadily increasing, as expected the mine was not able to cover its cash operating costs in the third quarter. &nbsp;A revised mining and processing plan has been developed and implemented to address the major issues that have hampered the mine since the start of commercial production at the beginning of 2004. &nbsp;The primary component of the plan was a switch to a more selective narrow vein mining method, which has decreased tonnes mined but substantially increased ore grades reported to the mill. &nbsp;In addition, the Company plans to further expand the reserve and resource base at the mine and to provide greater development flexibility in the future. The Company still expects La Colorada to achieve an annualized production rate of 3.5 million ounces at cash costs of less than $3.50 per ounce; however, the Company now believes these levels will not be reached until 
January 2005.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin-top:0pt; margin-bottom:5.5pt; font-family:Arial; font-size:11pt" align=justify>Consolidated cash costs for the nine-month period ended September 30, 2004 were $4.01 per ounce compared to $4.12 per ounce for the corresponding period of 2003. &nbsp;During this period, cash costs improved significantly at Quiruvilca, were stable at Huaron but were offset by higher than expected costs at La Colorada. &nbsp;With the addition of the low-cost Morococha mine and improvements at La Colorada, the Company expects consolidated cash costs to continue to decrease and is estimating consolidated silver production of approximately 11.5 million ounces at a cash cost of below $4.00 per ounce for 2004.</P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>&nbsp;</P>
<P style="margin:0pt"><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><font face="Times New Roman">21</font></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
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<P style="margin:0pt"><BR></P>
<P style="line-height:13pt; margin-top:0pt; margin-bottom:5.5pt; font-family:Arial; font-size:11pt"><B>Liquidity and Capital Resources</B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:normal; margin:0pt; font-family:Arial; font-size:11pt" align=justify>At September 30, 2004, cash and cash equivalents plus short-term investments were $80.84 million, a $37.90 million decrease from June 30, 2004. &nbsp;Investing activities consumed $37.32 million in cash and consisted primarily of the acquisition of the Morococha mine testing the viability of increasing production to a total of 2 million ounces per year for $36.21 million, expenditures on mineral property, plant and equipment of $2.68 million and proceeds from the liquidation of short-term investments of $2.01 million. &nbsp;Cash flow from operating activities was $7.0 million for the quarter ended September 30, 2004 before the net increase of $6.58 million in non-cash working capital. &nbsp;Increased non-cash working capital was primarily the result of increased accounts receivable and concentrate inventories associated with the concentrate producing Morococha mine. &nbsp;Financing activities in the third quarter yield
ed $0.79 million mainly from the exercise of stock options. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Working capital at September 30, 2004 was $94.55 million, a reduction of $30.8 million from June 30, 2004. &nbsp;The reduction is reflected largely in a $37.90 million decrease in cash and cash equivalents plus short-term investments plus a $3.15 million increase in current liabilities, offset by increases of $6.66 million in accounts receivable, $3.03 million in inventories and $1.28 million in prepaid expenses. </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Capital resources at September 30, 2004 amounted to shareholders&#146; equity of $260.81 million, capital leases of $0.33 million and deferred revenue of $0.75 million. &nbsp;At September 30, 2004, the Company had 66,752,572 common shares issued and outstanding.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt">Based on the Company&#146;s financial position at September 30, 2004 and the operating cash flows that are expected over the next twelve months, management believes that the Company&#146;s liquid assets are more than sufficient to fund planned operating and project development and sustaining capital expenditures and discharge liabilities as they come due. The Company&#146;s only contractual obligation at the date of this MD&amp;A was $0.4 million relating to a capital lease payable over the next two years. &nbsp;The Company does not have any off-balance sheet arrangements.</P>
<P style="margin:0pt"><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>Pan American mitigates the price risk associated with its base metal production by selling some of its forecasted base metal production under forward sales contracts. &nbsp;The Company incurred base metal hedging losses in the third quarter of 2004 totaling $3.36 million. &nbsp;At September 30, 2004, the Company had sold forward 25,140 tonnes of zinc at a weighted average price of $1,062 per tonne ($0.482 per pound) and 6,170 tonnes of lead at a weighted average price of $722 per tonne ($0.328 per pound). The forward sales commitments for zinc represent approximately 45 per cent of the Company&#146;s forecast zinc production until December 2005. &nbsp;The lead forward sales commitments represent approximately 35 per cent of the Company&#146;s forecast lead production until June 2005. At September 30, 2004, the cash offered prices for zinc and lead were $1,102 and $976 per tonne, respectively. The mark to market value at 
September 30, 2004 was ($2.57) million. &nbsp;However, due to significant declines in the price of zinc and lead since September 30, 2004, at the date of this MD&amp;A the mark to market valuation had improved to ($0.71) million.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR>
<BR></P>
<P style="line-height:14pt; margin:0pt; font-size:12pt" align="center"><font face="Times New Roman">22</font></P>
<P style="margin:0pt" align=center><BR></P>
<P style="margin:0pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
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<P style="margin:0pt"><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify><FONT FACE="Arial">At the end of the third quarter of 2004, the Company had fixed the price of 800,000 ounces of the third quarter&#146;s silver production contained in concentrates, which is due to be priced in October and November under the Company&#146;s concentrate contracts. &nbsp;The price fixed for these ounces averaged $6.58 per ounce while the spot price of silver was $6.67 on September 30, 2004.</FONT></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:14pt; margin:0pt; font-family:Arial; font-size:12pt" align=justify><B>Exploration and Development Activities</B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>At Huaron, progress towards expanding production rates continued during the quarter. &nbsp;The mine was able to maintain the monthly mining rates achieved in the second quarter, and is currently processing approximately 12 per cent more ore per month than a year ago. &nbsp;As part of the plan to increase production by up to 30 per cent at the Huaron mine, the Company initiated a second phase drill program focused on resource conversion. &nbsp;This is a continuation of the $1 million first phase drilling program completed in the first half of the year. &nbsp;Rehabilitation of the mine&#146;s 500 level is ongoing and is a key component of the plan to establish a second mining area, thereby allowing for an overall increase in monthly ore extraction. &nbsp;The cost of this program is being capitalized. &nbsp;</P>
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<P style="line-height:13pt; margin-top:0pt; margin-bottom:5.5pt; font-family:Arial; font-size:11pt" align=justify>During the third quarter of 2004, the Company completed a positive scoping study for the 50 per cent owned Manantial Espejo project in Argentina. &nbsp;Based on the results of the study, the Company will begin capitalizing future expenditures at the project with effect from October 1, 2004 and will continue to move forward with the study. &nbsp;Hatch Engineers developed the plant and infrastructure capital and operating cost estimates for the purposes of this scoping study. &nbsp;Snowden Engineers completed the scoping level open pit mining operating and capital cost estimates, which incorporated an updated mineral resource estimate. &nbsp;Vector Engineers have completed the archeological field program with no significant findings within the proposed disturbed area and the environmental baseline field programs are well underway. &nbsp;An additional 5,000 meters of infill and extension drilling ha
s been initiated, together with drilling to secure a water supply for the mine. &nbsp;The feasibility study for the project is expected to be completed by early 2005. &nbsp;Pan American&#146;s share of the feasibility costs in the first nine months of 2004 was $1.63 million, which was expensed as incurred. </P>
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<P style="line-height:13pt; margin-top:0pt; margin-bottom:5.5pt; font-family:Arial; font-size:11pt" align=justify>At Alamo Dorado in Mexico, a full time project manager has been hired as the Company started the process of staffing up for construction and operation. &nbsp;Progress has been made toward securing a power supply and the mine concessions have been successfully upgraded to exploitation concessions and explosives license received. &nbsp;Site hydrological investigations including development of a ground water monitoring program for any tailings facility designs are underway. &nbsp;Grindability tests were performed during the quarter and as a follow on from these tests, a pilot plant has been activated. &nbsp;The updated feasibility study is scheduled for completion in February 2005 incorporating the revised environmental permitting, pilot plant evaluation and tailings disposal facility design associated with the milling facility. </P>
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<P style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align=justify>At the San Vicente property, production continued under the 50,000 tonne agreement with EMUSA, a Bolivian mining company acting as operator. &nbsp;The small-scale test mining program has produced 210,451 ounces of silver in the first nine months of the year to Pan American&#146;s account. &nbsp;The Company continued to move forward with a feasibility study, including completing 11,364 meters of diamond drilling by the end of the third quarter and undertaking assessments of nearby processing facilities.</P>
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